U.S. 30-Year Mortgage Rate Declines to Record 4.32%
Mortgage rates for fixed 30-year U.S. loans dropped for the first time in four weeks, matching a record low, as housing demand remains depressed.
Rates for 30-year mortgages fell to 4.32 percent in the week ended today from 4.37 percent, Freddie Mac said in a statement. The average 15-year rate was 3.75 percent, according to the McLean, Virginia-based mortgage finance company.
This week’s 30-year rate matched the record reached four weeks ago that was the lowest in Freddie Mac data dating to 1971. Low borrowing costs have done little to bring homebuyers back to the market as unemployment hovers near 10 percent.
“There’s a problem with confidence because the unemployment rate remains very high,” said Donald Rissmiller, chief economist at Strategas Research Partners in New York. “We have a housing market struggling to stay flat at very depressed levels.”
Home prices in 20 U.S. cities rose at a slower pace in July from a year earlier as the end of a federal tax credit hurt sales, the S&P/Case-Shiller index of property values showed this week. A high number of foreclosures also is reducing demand for homes. Banks seized a record 95,364 homes from delinquent borrowers in August, according to RealtyTrac Inc.
The Mortgage Bankers Association’s loan application index fell 0.8 percent in the week ended Sept. 24 to the lowest level in almost two months. Purchase applications increased 2.4 percent, while refinancing declined 1.6 percent, the Washington- based group said yesterday.
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.
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