Mortgage rates fall to record low 3.49 percent

Mortgage rates for 15-year agreements fell to a new record low this week, and the average 30-year rate touched its record low. Mortgage rates matched their lowest level since long-term mortgages began in the 1950s.

The average U.S. rate on the 30-year fixed mortgage touched its record low this week and the rate on 15-year mortgage hit a new record.

The declines followed the Federal Reserve announcement last week that it would buy bonds to try to push mortgage rates lower and stimulate the housing market.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan declined to 3.49 percent from 3.55 percent last week. That matched the lowest rate since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, plunged to 2.77 percent, a new record. That's down from 2.85 percent last week and the previous record low of 2.80 percent.

Cheap mortgages have helped drive a modest housing recovery this year. And the Fed wants to keep those rates low for the foreseeable future as a way to stimulate the economy.

Last week the Fed said it plans to spend $40 billion a month to buy mortgage bonds for as long as it thinks necessary to make home buying more affordable.

Mark Vitner, senior economist at Wells Fargo, said the stimulus likely helped lower mortgage rates this week. And the Fed's bond purchases will probably push rates down even further over the next six to nine months, Vitner suggested.

"Mortgage rates are going to be lower than they would otherwise," he said. "Housing looks like it's going to provide a significant lift to the economy over the next year."

The market is already benefiting from the lowest rates on record.

Sales of both previously occupied and newly built homes are up from last year. Home prices are rising more consistently. And builders are more confident in the market and are starting to build more homes.

The broader economy is also likely to benefit from a revival in the housing market. When home prices rise, Americans typically feel wealthier and spend more — a point made by Fed Chairman Ben Bernanke when he addressed the new stimulus measures last week.

Still, the housing market has a long way back. Sales and construction rates remain below healthy levels.

And some economists question whether lower rates will make much of a difference. The average rate on the 30-year fixed mortgage has been below 4 percent since early December. So most people who can qualify have likely already taken advantage of the lower rates.

Many people who would like to refinance or buy a home can't because they fail to meet stricter lending requirements or don't have enough money to make a down payment.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 0.6 point, unchanged from last week. The fee for 15-year loans also held steady at 0.6 point.

The average rate on one-year adjustable-rate mortgages was unchanged at 2.61 percent. The fee for one-year adjustable rate loans was steady at 0.4 point.

The average rate on five-year adjustable-rate mortgages rose to 2.76 percent from 2.72 percent. The fee was unchanged at 0.6 point.