Mortgage Rates Hit Lowest Point Ever, Again

WASHINGTON -- Average U.S. rates for 30-year and 15-year fixed mortgages fell to fresh record lows this week. Cheap mortgage rates have made home-buying and refinancing more affordable than ever for those who can qualify.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan ticked down to 3.83 percent. That's the lowest since long-term mortgages began in the 1950s. And it's below the previous record rate of 3.84 percent reached last week.

The 15-year mortgage, a popular option for refinancing, dropped to 3.05 percent, also a record. That's down from last week's previous record of 3.07 percent.

Low mortgage rates haven't done much to boost home sales. Rates have been below 4 percent for all but one week since early December. Yet sales of both previously occupied homes and new homes fell in March.

Why Loans Are Still Out of Reach

There have been some positive signs in recent months. January and February made up the best winter for sales of previously occupied homes in five years. And builders are laying plans to construct more homes in 2012 than at any other point in past 3½ years. That suggests some see the housing market slowly starting to turn around.

Still, many would-be buyers can't qualify for loans or afford the higher down payments required by banks. Home prices in many cities continue to fall. That has made those who can afford to buy uneasy about entering the market. And for those who are willing to brave the troubled market, many have already taken advantage of lower rates -- mortgage rates have been below 5 percent for more than a year now.

Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note. Slower U.S. job growth and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasurys, which are considered safe investments. As demand for Treasurys increases, the yield falls.

To calculate the average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

Some Fees Drop Too

The average rage does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 last week, down from 0.8 the previous week. The fee on 15-year loans also was 0.7, unchanged from the previous week.

The average on one-year adjustable rate was 2.73 percent last week, down from 2.7 percent the previous week. The fee on one-year adjustable rate mortgages was 0.5, down from 0.6.

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