Mortgage Rates for 30-Year U.S. Loans Decline to Record LowPrashant Gopal
Mortgage rates for 30-year U.S. loans dropped to the lowest level on record amid signs the housing market may be set for a turnaround.
The average rate for a 30-year fixed loan fell to 3.91 percent in the week ended today, the lowest in data dating to 1971, from 3.94 percent, Freddie Mac said in a statement. The average 15-year rate matched last week’s previous all-time low of 3.21 percent, according to the McLean, Virginia-based mortgage-finance company.
The U.S. housing market, under pressure from tight lending standards and foreclosures that depress values, is showing signs of improvement. Purchases of previously owned homes rose to a 10-month high in November as the inventory of unsold properties shrank to the lowest level in six years, the National Association of Realtors reported yesterday.
“Falling home prices meeting already low interest rates are driving affordability,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York. “Mix that with higher consumer confidence and job growth, and I can see why home sales appear to be lifting off the bottom.”
The U.S. property market still may fall further and not rebound until late 2012 or early 2013, when gains probably won’t match those seen before the housing boom ended in 2006, according to a survey of 109 economists released this week by Seattle-based Zillow Inc.
Unemployment Claims Decline
The number of Americans filing claims for unemployment benefits decreased last week to the lowest level since April 2008, the Labor Department said today. November’s unemployment rate was 8.6 percent, the lowest since March 2009.
Existing-home sales climbed 4 percent in November from the previous month to a 4.42 million annual pace, the highest level since January, according to the Realtors. The number of previously owned houses on the market dropped to 2.58 million last month, the fewest since May 2005, the group said.
U.S. home-loan applications declined in the week ended Dec. 16, according to the Mortgage Bankers Association. The Washington-based group’s index of purchases fell 4.9 percent, while its measure of refinancing dropped 1.6 percent.
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