Mortgage rates in the U.S. fell for a second week, reducing borrowing costs as more homeowners seek to refinance into less expensive loans.
The average rate for a 30-year fixed mortgage was 3.43 percent in the week ended today, down from 3.54 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate dropped to 2.65 percent from 2.74 percent.
More borrowers are taking advantage of rates near record lows to reduce their monthly payments. The Mortgage Bankers Association’s index of refinance applications rose 6.3 percent in the week ended April 5. The purchase gauge fell 1.3 percent, the Washington-based group said yesterday.
“The near record-low mortgage rates are very important for refinancing, but less so for home purchase,” Jed Kolko, chief economist for San Francisco-based Trulia Inc., a San Francisco-based online real estate information service, said yesterday in a telephone interview. “Refinances are very sensitive to mortgage rates.”
An increase in rates may actually prompt more purchases because buyers would be concerned about losing out on low financing costs, Kolko said.
The average 30-year mortgage rate dropped to a record 3.31 percent in November, according to Freddie Mac. The 15-year rate fell to 2.63 percent, also the lowest on record.