The average U.S. rate on the 30-year fixed mortgage fell back below 4 percent this week, staying near historic lows.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.99 percent from 4.08 percent last week. Last month, the rate touched 3.87 percent, the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year fixed mortgage also fell, to 3.23 percent. That's down from 3.30 percent last week and above the record low of 3.13 percent hit earlier this month.
The low rates have made home-buying and refinancing more affordable at a time when the housing market is flashing small signs of improvement. Still, most economists say it will take years for the market to fully recover from the housing bust.
January and February made up the best winter for re-sales in five years, when the housing crisis began. And builders are more confident about the market. In February, they requested the most permits to build single-family homes and apartments since October 2008.
An improved job market may also be helping home sales. Employers have added an average 245,000 net jobs per month from December through February. That has helped reduce the unemployment rate to 8.3 percent, the lowest level in nearly three years.
Rates rose a bit earlier this month after positive economic news pushed up yields on U.S. Treasury bonds. Mortgage rates then to track the yield on the 10-year Treasury note.
An improving economic outlook can lead investors to shift money from Treasury bonds to stocks. That pushes up Treasury yields.
Even with signs of improvement in housing, home prices continue to fall. Millions of foreclosures and short sales _ when a lender accepts less than what is owed on a mortgage _ remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy, which has led to a drop in homeownership.
To calculate the average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average rates don't 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 the 30-year fixed loan was 0.7. For the 15-year fixed loan, the average was 0.8.
For the five-year adjustable loan, the average rate fell to 2.90 percent from 2.96 percent, and the average fee was unchanged at 0.8.
The average on the one-year adjustable loan dropped to 2.78 percent from 2.84 percent, and the average fee was unchanged at 0.6.
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