May 17 (Bloomberg) -- Mortgage rates in the U.S. fell to a record for a third straight week, reducing borrowing costs as the housing market improves and home-loan defaults decline.
The average rate for a 30-year fixed loan dropped to 3.79 percent in the week ended today from 3.83 percent, Freddie Mac said in a statement. It was the lowest in the McLean, Virginia-based mortgage-finance company’s data dating to 1971. The average 15-year rate decreased to 3.04 percent, also a record, from 3.05 percent.
Record-low mortgage rates, combined with job gains and lower-priced homes, are helping to lift housing demand and stabilize the real estate market. Housing affordability reached a new high in the first quarter and sales of previously owned homes rose 5.3 percent from a year earlier, data from the National Association of Realtors show. The share of home loans at least 30 days late dropped to 7.4 percent, the lowest since 2008, the Mortgage Bankers Association said yesterday.
Low borrowing costs are encouraging homeowners to reduce their monthly bills. The mortgage bankers’ measure of refinancing applications jumped 13 percent in the week ended May 11, the mortgage-banking group said yesterday. The gauge of purchases declined 2.4 percent.
Builders began work on more homes than analysts estimated in April, a sign the real estate market is stabilizing. Housing starts climbed 2.6 percent from the previous month to an annual pace of 717,000, Commerce Department data showed yesterday.
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