Mortgage rates in the U.S. declined, keeping borrowing costs near the lowest on record as investors sought the safety of government bonds amid turmoil in Greece.
The average rate for a 30-year fixed loan dropped to 4 percent in the week ended today from 4.1 percent, Freddie Mac said in a statement. The average 15-year rate fell to 3.31 percent from 3.38 percent, according to the McLean, Virginia-based mortgage-finance company.
U.S. Treasury yields, a guide for consumer loans including mortgages, declined this week as Greek Prime Minister George Papandreou called for a referendum on a debt bailout, putting the country’s rescue package into question. U.S. homebuyers have been slow to take advantage of a drop in borrowing costs that sent the 30-year rate to 3.94 percent last month, the lowest in Freddie Mac records dating to 1971.
“Record-low interest rates take time to permeate down to folks making decisions to buy homes,” said Keith Gumbinger, vice president of HSH Associates, a loan-data firm in Pompton Plains, New Jersey. “If rates remain at this level, some improvement is to be expected.”
The U.S. homeownership rate was 66.3 percent in the third quarter, close to the 13-year low reached in the previous three months, the Census Bureau said in a report yesterday.
The number of contracts to purchase previously owned homes fell 4.6 percent in September, the biggest decline since April, the National Association of Realtors said Oct. 27.
Home-loan applications increased 0.2 percent in the week ended Oct. 28, according to a Mortgage Bankers Association index. The Washington-based group’s measure of purchases advanced 1.8 percent, while the refinancing gauge slipped 0.2 percent.