Mortgage Rates for 30-Year Loans Fall to Near-Record Low
Mortgage rates in the U.S. for 30- year fixed loans fell for the fourth time in five weeks, decreasing borrowing costs as the housing market reaches bottom.
The average rate for a 30-year mortgage fell to 3.88 percent in the week ended today from 3.9 percent, Freddie Mac (FMCC) said in a statement. It hit 3.87 percent in February, the lowest in the McLean, Virginia-based mortgage-finance company’s records dating to 1971. The average 15-year rate dropped to 3.12 percent from 3.13 percent.
While the U.S. home market is showing signs of improvement, tight credit and an unemployment rate above 8 percent are holding back demand. Home values in more than half of major U.S. markets will probably reach a bottom by the end of the year, Seattle-based data provider Zillow Inc. (Z) said yesterday.
“Great affordability helps,” David Goldberg, an analyst with UBS AG (UBSN) in New York, said in a telephone interview yesterday. “But the availability of credit is what will dictate the pace of improvement.”
Contracts to buy previously owned homes climbed 4.1 percent last month from February to the highest level in two years, the National Association of Realtors said today.
Home prices in 20 U.S. cities fell 3.5 percent in February, the smallest 12-month decline since February 2011, the S&P/Case- Shiller index showed on April 24.
To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
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