For the ninth time in 10 weeks, mortgage rates have fallen to the lowest level in decades, fuelled by fear that the US economy is weakening.
The average rate for a 30-year fixed loan this week was 4.36 percent, which is down from last week’s 4.42 percent, according to Mortgage buyer Freddie Mac. That’s the lowest it has been since Freddie Mac started tracking loan rates in 1971.
The average lending rate on a 15-year fixed loan has dropped from 3.90 percent one week ago to 3.86 percent this week. And that’s the lowest it has been since 1991, when Freddie Mac started keeping such records.
Loan rates have gone down since spring as nervous investors moved their money to Treasury bonds for safety. This lowered their yield, and mortgage rates usually follow those yields.
Cheered by these low rates, demand for home loan mortgage refinancing is now at the highest level seen since May 2009, and refinancing is 82.4 percent of all new loans business.
Despite the low interest rate for home loans that’s on offer, sales of new homes have been down sharply since home-buying tax credits finished in April. And high unemployment and slow job growth are keeping those sales down.