The typical rate that lenders are offering on a standard 30-year mortgage is back below 4 percent for the second time this year, according to Freddie Mac.
The rate fell from an even 4 percent in Freddie Mac's survey last week to 3.99 percent in the survey released Thursday. The 3.94 percent rate recorded in the Oct. 6 report was the lowest in the 40 years that Freddie Mac has been asking lenders across the country about the rate they are offering on the 30-year loan.
The typical interest rate on the 15-year fixed home loan dropped to 3.30 percent from 3.31 percent in the latest survey. Borrowers would have paid less than 1 percent of the loan balance in fees to obtain the loans, Freddie Mac said.
Solid borrowers who shop around often find slightly better rates than those in the survey, and paying additional points upfront to lenders also can lower the rate.
The mortgage rates are a huge boon for home buyers and refinancers with solid credit and income, 20 percent down payments or 20 percent home equity — the kind that would qualify for the loans of up to $417,000 that the survey focuses on.
But they are available at a cloudy time. Foreclosures are rising again, and the rates are scraping bottom mainly because investors are so spooked by the European debt crisis. That has increased demand for U.S. debt securities, still presumed to be a safe haven.
That demand has depressed the yield on Treasury securities, and mortgage rates tend to track Treasury yields. And there is too little in the recent mixed economic news to suggest that inflation could reassert itself in the U.S., driving interest rates higher.
"The economy added 80,000 net jobs in October, below the market consensus forecast, but employment gains over the prior two months were revised up by 102,000 and the unemployment rate fell to 9.0%, the lowest in six months," Freddie Mac economist Frank Nothaft said. "Factory orders improved in September, yet the expansion in the service industry slowed in October."