Mortgage rates in the U.S. declined as more Americans sought financing for home purchases.
The average rate for a 30-year (NMCMFUS) fixed loan fell to 3.9 percent in the week ended today from 3.95 percent, Freddie Mac (FMCC) said in a statement. The rate dropped to 3.87 percent earlier last month, the lowest in Freddie Mac records dating to 1971. The average 15-year (NMCM15US) rate decreased to 3.17 percent from 3.19 percent, according to the McLean, Virginia-based mortgage- finance company.
Mortgage applications for house purchases jumped 8.2 percent in the period ended Feb. 24, the most in six weeks, according to a Mortgage Bankers Association index. The Washington-based group’s refinancing gauge fell 2.2 percent. While housing demand is improving, sales have been restrained by tight credit and a jobless rate holding above 8 percent.
“Affordability has increased dramatically as a result of the decline in house prices and historically low interest rates on conventional mortgages,” Federal Reserve Chairman Ben S. Bernanke said yesterday in testimony to the House Financial Services Committee in Washington. “Unfortunately, many potential buyers lacked the down payment and credit history required to qualify for loans. Others are reluctant to buy a house now because of concerns about their income, employment prospects and the future path of house prices.”
Sales (ETSLTOTL) of previously owned homes rose 4.3 percent in January from the previous month, the National Association of Realtors reported Feb. 22. Foreclosures and other distressed properties, which made up the largest share of all purchases since April, have been depressing prices.
The S&P/Case-Shiller index of home values in 20 cities fell 4 percent in December from a year earlier, after decreasing 3.9 percent in November, a report from the group showed Feb. 28.
To contact the reporter on this story: Prashant Gopal in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Daniel Taub at email@example.com