Mortgage Rates for 30-Year U.S. Loans Fall to 3.94% as Record Low Matched
By Prashant Gopal - Dec 15, 2011, from www.bloomberg.com
Mortgage rates for 30-year U.S. loans declined, matching the lowest level on record, as the European debt crisis drove investors to the relative safety of Treasury bonds.
The average rate for a 30-year fixed loan fell to 3.94 percent in the week ended today from 3.99 percent, Freddie Mac (FMCC) said in a statement. That rate, first reached in October, is the lowest in records dating to 1971. The average 15-year rate fell to an all-time low of 3.21 percent from 3.27 percent, according to the McLean, Virginia-based mortgage-finance company.
The housing market has been weighed down by an 8.6 percent unemployment rate, tighter lending and foreclosures even as borrowing costs fall. Yields on 10-year Treasuries, a benchmark for consumer loans including mortgages, dropped this week amid concern thatEurope's fiscal crisis will hobble U.S. expansion.
"To the extent Europe's credit crisis is lowering Treasury yields and mortgage rates, that would support the U.S. housing market," Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said in an interview yesterday. "Unfortunately there are negative ramifications from Europe's crisis, in particular the drop in equity values and the impact on consumer confidence."
Lower borrowing costs have helped boost refinancing as homeowners seek to reduce their monthly payments. U.S. home-loan applications climbed 4.1 percent in the week ended Dec. 9, according to a Mortgage Bankers Association index. The Washington group's gauge of refinancing climbed 9.3 percent, while its index of purchases fell 8.2 percent.
Connect to maplesweet.com, e-mail email@example.com or call toll-free 1-800-525-7965 to arrange for showings, list your property, or look further into Vermont's real estate market or obtaining a mortgage.