30-Year Home Loan Rates Decrease

This week, rates for 30-year home loans fell to a shade below 5%.Down from 5.06% a week earlier, mortgage company Freddie Mac stated the average rate on a 30-year fixed mortgage was 4.99%.It was the 3rd consecutive weekly decline. This week, as concerns about the economy increased demand for the safety of government debt, which is closely tied to mortgage rates, the drop comes after interest rates fell in the bond market.On Monday through Wednesday of each week, Freddie Mac collects mortgage rates from lenders around the U.S. Even within a given day, rates frequently fluctuate, often in line with long-term Treasury bonds.In early December, pushed down by an aggressive government campaign to reduce consumers’ borrowing costs, rates for 30-year loans had dropped to a record low of 4.71%.Though that money is set to run out next spring, the Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates. The goal of the program is to prop up the housing market and make home buying more affordable.Down from 4.45% last week, according to Freddie Mac, the average rate on 15-year fixed-rate mortgages fell to 4.4%.Down from 4.32% a week earlier, rates on five-year, adjustable-rate mortgages averaged 4.27%. From 4.39%, rates on one-year, adjustable-rate mortgages dropped to 4.32%.The rates do not include points, also known as add-on fees. 1% of the total loan amount is equal to one point.The countrywide fee for loans in Freddie Mac’s survey averaged 0.6 point for 15-year, five-year and one-year loans, and 0.7 point for 30-year loans.Source: builderonline.com