Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

U.S. 30-Year Mortgage Rate Falls Below 4% for First Time

30-Year Mortgage Rates in U.S. Fall Below 4%
Shelley Mitchiner, a real estate broker for Team Marti Re/Max One Realty, left, shows Sharon Willard an existing home for sale in Raleigh, North Carolina. Photographer: Jim R. Bounds/Bloomberg

Mortgage rates in the U.S. fell, sending longer-term borrowing costs below 4 percent for the first time on record, as stricter credit standards and the slowing economy hold back a housing rebound.

The average rate for a 30-year fixed loan dropped to 3.94 percent in the week ended today from 4.01 percent, Freddie Mac said in a statement. That’s the lowest in the McLean, Virginia-based company’s records dating back to 1971. The average 15-year rate declined to 3.26 percent from 3.28 percent last week.

Mortgage rates have tracked a slide in 10-year Treasury yields amid concern that Europe’s debt crisis is worsening and the U.S. economy may slide back into a recession. Low borrowing costs have done little to revitalize the U.S. property market as unemployment sticks above 9 percent, banks tighten credit and home values decline. The Federal Reserve announced a plan last month aimed at bolstering the economy and reducing loan rates further by replacing shorter-term securities in its portfolio with longer-term debt.

“There’s nothing to gloat over,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said in a telephone interview today. “The record low interest rates are a reflection of the times. The U.S. economy is fragile and the global economic headwinds remain brisk.”

Loan Applications

Home-loan applications decreased 4.3 percent in the period ended Sept. 30 from the prior week, according to a Mortgage Bankers Association index. The refinancing gauge dropped 5.2 percent while the purchasing measure fell 0.8 percent, the Washington-based trade group said yesterday.

Mortgage demand may be tested because new loan limits were introduced this week for certain high-priced areas. The 9.1 percent drop in purchase applications for September from the previous month suggests that buyers weren’t rushing to meet the deadline and the limits won’t have a significant impact on borrowing, according to Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto.

The number of contracts to purchase previously owned homes declined 1.2 percent in August, following a 1.3 percent drop the previous month, the National Association of Realtors reported last week. The S&P Case-Shiller index of home values in 20 U.S. cities decreased 4.1 percent in July from a year earlier.

Purchases of new houses fell in August to a six-month low, according to the Commerce Department. The median price slumped 7.7 percent from August 2010, the steepest 12-month drop since July 2009.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.