Fixed mortgages: new lows for 15-, 30-year loans

Fixed mortgages for 30-year loan dips to 3.79 percent; 15-year loan averages. 3.04 percent. But record low rates on fixed mortgages have not ignited home sales.

By Marcy Gordon,?AP Business Writer / May 18, 2012

A San Jose, Calif., home sits empty as it is put on the market for sale in this April file photo. The average rate for conventional fixed mortgages fell to new lows this week.

Tony Avelar/Staff/File

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Average U.S.?rates?for 30-year and 15-year fixed?mortgages?fell to record lows for the third straight week. The steady decline has made home-buying and refinancing more affordable than ever for those who can qualify.

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Mortgage?buyer Freddie Mac says the?rate?on the 30-year loan dipped to 3.79 percent. That's down from 3.83 percent last week and the lowest since long-term?mortgages?began in the 1950s.

The 15-year?mortgage, a popular option for refinancing, declined to 3.04 percent. That's down from last week's previous record of 3.05 percent.

Rates?on the 30-year loan have been below 4 percent since early December. But so far, those cheap?rates haven't been enough to ignite home sales.

While sales of previously occupied homes picked up in January and February, they fell again in March and remain well below healthy levels.

Low?mortgage?rates?have helped boost builder confidence, which rose in May to a five-year high. And home construction has improved in the past six months, a reflection of that increase in confidence.

Builders broke ground in April at a seasonally adjusted annual pace of 717,000 homes, the government reported Wednesday. That nearly matches January's pace, the best since October 2008.

Construction rose for both single-family homes and apartments. And builders requested more permits to build single-family homes, a sign they expect more demand in the coming months.

Still, many would-be buyers can't qualify for loans or afford 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.

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, unchanged from the previous week. The fee on 15-year loans also was 0.7, the same as the previous week.

The average one-year adjustable?rate?was 2.78 percent last week, up from 2.73 percent the previous week. The fee on one-year adjustable?rate?mortgages?was unchanged at 0.5.

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