US mortgage rates hit low of 4.44 per cent

WASHINGTON: US mortgage rates sank to the lowest level in decades this week, pushed down by the Federal Reserve's move to buy up government debt to help lift the economic recovery.

Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.44 per cent, down from 4.49 per cent last week. That's the lowest since Freddie Mac began tracking rates in 1971.

The average rate on the 15-year fixed loan dropped to 3.92 per cent, down from 3.95 per cent last week and the lowest on record.

Rates have fallen since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.

Low rates have failed to spark home sales, which have plummeted this summer as the economy remains weak and credit standards stay tight. Applications to refinance home loans have grown but remain well short of a massive refinancing boom.

Overall home loan applications rose only 0.6 per cent last week from a week earlier, the Mortgage Bankers Association said Wednesday.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.56 per cent, down from 3.63 per cent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.53 per cent from 3.55 per cent.

The rates do not include add-on fees known as points. One point is equal to 1 per cent of the total loan amount. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 a point for all loans except for 15-year mortgages, which averaged 0.6 of a point.