The average interest rate for a 30-year mortgage dropped to a record
low of 4.71 percent this week, pushed down by an aggressive government
campaign to reduce borrowing costs.
rate, published Thursday by Freddie Mac, is the lowest since the
mortgage finance company began tracking the data in 1971. The previous
record of 4.78 percent was set during the week ending April 30 and
matched last week.
The Federal Reserve is pumping $1.25 trillion
into mortgage-backed securities to try to bring down mortgage rates,
but that money is set to run out next spring. The goal of the program
is to make home buying more affordable and prop up the housing market.
the government support, qualifying for a loan is still tough. Lenders
have tightened their standards dramatically, so the best rates are
available to those with solid credit and a 20 percent down payment.
Mac collects mortgage rates on Monday through Wednesday of each week
from lenders across the country. Rates often fluctuate significantly,
even within a given day, often tracking yields on long-term Treasury
This week drop reflects a rush of investors into the
security of government debt after concerns about financial trouble in
Dubai drove investors to safe harbors. But rates climbed back later in
the week, and analysts say they are likely to remain volatile.
are no guarantees that mortgage rates are going to stay at these low
levels," said Greg McBride, senior financial analyst at Bankrate.com.
millions of American families have not been able to take advantage of
them, particularly in the areas where home prices have fallen the most.
11 million households, or 23 percent of homeowners with a mortgage, owe
more on their home loans than their house is currently worth according
to First American CoreLogic, a real estate information company.
That makes refinancing difficult.
the government has launched a program designed to help these
"underwater" borrowers, only about 140,000 homeowners have used it so
In Orlando, mortgage broker Chris Brown says the low rates
are a boon to first-time homebuyers who can qualify for a loan. But he
says he isn't getting much business from homeowners looking to
"Most of the people that could refinance probably
have" done so, he said. "Rates have been artificially low for quite
The average rate on a 15-year fixed-rate mortgage
fell to a record low of 4.27 percent, from 4.29 percent last week,
according to Freddie Mac.
Rates on five-year, adjustable-rate
mortgages averaged 4.19 percent, up from 4.18 percent a week earlier.
Rates on one-year, adjustable-rate mortgages fell to 4.25 percent from