Mortgage rates fell in the past week to the latest in a series of record lows amid concerns about the state of the economy, according to a survey released on Thursday by Freddie Mac.
Rock-bottom rates offer a glimmer of hope for a housing market struggling to gain traction since the expiration of popular home-buyer tax credits several months ago.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.49 percent for the week ended August 5, down from the previous week's 4.54 percent and its year-ago level of 5.22 percent, according to the survey.
Thirty-year mortgage rates have fallen to fresh lows in six out of the last seven weeks.
Freddie Mac, the second-largest U.S. mortgage finance company, started the survey in April 1971.
Fifteen-year fixed-rate mortgages averaged 3.95 percent, down from 4.00 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991. Fifteen-year mortgage rates have hit fresh lows in five of the last seven weeks.
With interest rates dropping to their lowest since Freddie Mac started the survey, demand for home refinancing and home purchase loans has picked up, boding well for the housing market as well as the overall economy.
"And yet again, interest rates for fixed-rate mortgages and now the hybrid 5-year ARM fell to all-time record lows this week following the second quarter GDP release," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Annual revisions cut the cumulative growth in U.S. gross domestic product in half over the past three years ending in the first quarter of 2010, from 1.4 percent to 0.6 percent. This reduces inflationary pressures and allows longer-term rates room to ease, he said.
Mortgage rates are linked to yields on U.S. Treasuries and yields on mortgage-backed securities.
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