The average rate on the 30-year fixed mortgage hovered above its record low for a fourth straight week. But cheap mortgage rates have done little to boost home sales or refinancing.
Freddie Mac says the rate on the 30-year fixed loan fell to 3.98 percent from 4 percent the previous week. Seven weeks ago, it dropped to a record low of 3.94 percent, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage edged down to 3.3 percent from 3.31 percent. Seven weeks ago, it too hit a record low of 3.26 percent.
Rates have been below 5 percent for all but two weeks this year. Yet this year could be the worst for home sales in 14 years.
Mortgage rates track the yield on 10-year Treasury note. The yield fell this week as investors shifted money into safer Treasurys amid uncertainty in the U.S. economy and fears Europe's debt crisis could worsen. Treasury yields fall when buying activity increases.
Low mortgage rates haven't translated into higher home sales. Mortgage applications dropped 1.2 percent last week from the previous week, the Mortgage Bankers Association said Wednesday.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
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 fees for the 30-year and 15-year fixed mortgages were unchanged from 0.7.
The average rate on the five-year adjustable loan fell to 2.91 percent from 2.97 percent. The average rate on the one-year adjustable loan also fell, declining to 2.79 percent from 2.98 percent.
The average fees on the five-year and one-year adjustable loans were unchanged from 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.