A new survey released this week by Freddie Mac showed mortgage rates in the U.S. have again reached record lows.
Interest rates for 30-year fixed rate home loans, the most common type of mortgage, averaged 4.19 percent during the week before October 14. That is down from 4.27 percent the week earlier, which had been the lowest average on record, based on the survey taken since 1971.
For 23 weeks now, 30-year fixed mortgages have been below 5 percent. The rates are also under where they were a year ago, or 4.92 percent, according to Freddie Mac, the second-largest mortgage finance company in the United States.
The record-low rates give the struggling housing market a small sign of hope after a popular homebuyer tax credit expired earlier this year. However, the weak economy and sluggish job market mean the housing market is still dealing with an overabundance of inventory.
At the same time, 15-year fixed-rate mortgages have fallen from an average of 3.72 percent to 3.62 percent in the last week, the lowest rate since Freddie Mac began tracking the loan in 1991.
“September’s employment report held no big surprises to financial markets, allowing long-term bond yields and fixed mortgage rates to continue to ease,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a result, both the 30-year and 15-year fixed mortgage rates hit all-time record lows for the third consecutive week.”
The low rates have encouraged many homeowners to refinance their loans. Refinancing applications increased for the first time in six weeks, the Mortgage Bankers Association reported Wednesday.