Mortgage rates slip back toward record lows

Mortgage rates edge down this week to 3.39 percent for a 30-year loan. As mortgage rates have fallen this year to record lows, home sales and refinancings have picked up 

Nam Y. Huh/AP
In this October photo, a for-sale sign is posted in Lincolnwood, Ill. Mortgage rates have edged lower and are near their record lows, mortgage buyer Freddie Mac said Thursday, Nov. 1, 2012.

The average U.S. rate on a 30-year fixed mortgage slipped this week and stayed near its record low, a trend that's helped boost home sales and refinancing.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan declined to 3.39 percent from 3.41 percent last week. Four weeks ago, the rate touched 3.36 percent, the lowest level on records dating to 1971.

The average on the 15-year fixed mortgage, often used for refinancing, fell to 2.70 percent. That's down from 2.72 percent last week and close to the record low of 2.66 percent reached two weeks ago.

The low rates have helped drive a modest housing recovery. Rates have fallen further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending.

Home sales have increased from last year, and prices are rising more consistently in most areas. Builders are more confident and beginning work on more homes.

Lower rates have also persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending.

In August, home prices rose in nearly all U.S. cities, and many of the markets that were hit hardest during the housing crisis are starting to show sustained gains, according to the latest Standard & Poor's/Case Shiller index. It was the third straight increase.

Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money to meet larger down payment requirements.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans ticked up to 0.7 point from 0.6.

The average rate on a one-year adjustable-rate mortgage dipped to 2.58 percent from 2.59 percent. The fee for one-year adjustable rate loans remained at 0.4 point.

The average rate on a five-year adjustable-rate mortgage edged down to 2.74 percent from 2.75 percent. The fee was unchanged at 0.6 point.

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