Mortgage Rates for 30-Year U.S. Loans Decrease to 4.60%
May 26, 2011, 12:26 PM EDTBy Brian Louis and Prashant Gopal
(Updates with 15-year rate in second paragraph.)
May 26 (Bloomberg) -- U.S. mortgage rates fell to the lowest level in almost six months, providing support to a real estate market that is struggling to recover.
The average rate for a 30-year loan slipped to 4.60 percent in the week ended today from 4.61 percent, according to Freddie Mac. That is the lowest since the week ended Dec. 2. The 15-year rate fell to 3.78 percent from 3.80 percent a week ago, the McLean, Virginia-based mortgage-finance company said.
Interest rates below 5 percent have done little to energize the U.S. real estate market, which has been weakened by tight credit, mounting foreclosures and unemployment at 9 percent. Home prices dropped 5.5 percent in the first quarter from a year earlier as sales of foreclosures, which sell at a discount, dragged down the value of all properties, the Washington-based Federal Housing Finance Agency said yesterday.
Purchases of previously owned homes fell 0.8 percent in April to a 5.05 million annual pace in April, according to the National Association of Realtors. New-home sales rose in April for a second month, gaining 7.3 percent to a 323,000 annual rate, the Commerce Department said May 24.
The Mortgage Bankers Association’s measure of refinancing climbed 0.9 percent in the week ended May 20, the fourth straight increase. Purchase applications rose 1.5 percent, the Washington-based group said yesterday.
The average rate for a 30-year fixed loan is below where it was last year at this time, when it was 4.84 percent, according to Freddie Mac. It fell to a record low 4.17 percent in November.
--Editors: Christine Maurus, Kara Wetzel
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
