Oct. 27 (Bloomberg) -- Mortgage rates in the U.S. were little changed, keeping borrowing costs close to the lowest level on record as the housing market stagnates.
The average rate for a 30-year fixed loan declined to 4.10 percent in the week ended today from 4.11 percent, Freddie Mac said in a statement. The average 15-year rate held at 3.38 percent, according to the McLean, Virginia-based mortgage- finance company.
Buyers have been slow to take advantage of a drop in borrowing costs that sent the 30-year rate to 3.94 percent this month, the lowest level in Freddie Mac records dating to 1971. Sales of previously owned homes, which make up more than 90 percent of the market, fell 3 percent to a 4.91 million annual rate in September, the National Association of Realtors said Oct. 20. The median price slid 3.5 percent from a year earlier.
“At this stage, the problem with the housing market is not rates,” said Millan Mulraine, senior U.S. strategist at TD Securities in New York. “The problem is potential homebuyers continue to sit on the sidelines while waiting for more attractive entry points for prices, and credit conditions continue to be tight.”
The Mortgage Bankers Association’s home-loan applications index rose 4.9 percent in the week ended Oct. 21 after plunging 15 percent in the previous period. The Washington-based group’s purchasing gauge rose 6.4 percent last week, and its refinancing index climbed 4.4 percent.
New-home purchases increased 5.7 percent in September to a 313,000 annual pace, figures from the Commerce Department showed yesterday. The median price slumped 10 percent from September 2010, the biggest drop in more than two years.
--Editors: Kara Wetzel, Christine Maurus
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