Julie Haviv
USA Today
NEW YORK — Interest rates on U.S. 30-year fixed-rate mortgages dropped for the 11th week to a record low, according to a survey released Thursday by home funding company Freddie Mac.
Interest rates on 30-year fixed-rate mortgages averaged 4.96%, with an average 0.7 point, for the week ended Jan. 15, down from the previous week’s 5.01%, according to Freddie Mac.
Low mortgage rates have spurred a surge in home refinancing, and the resulting lower monthly payments should provide some relief to strapped consumers grappling with rising unemployment and recession.
But the drop in mortgage rates has made only a marginal impact on demand for loans to buy a home, offering little sign of recovery from the worst housing downturn since the Great Depression.
Mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan last month to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae, Freddie Mac, and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
The average rate for 30-year fixed-rate mortgages has not been lower since Freddie Mac started its Primary Mortgage Market Survey in 1971.
15-year fixed-rate mortgages averaged 4.65% the week ended Jan. 15, up from 4.62% the previous week.
One-year adjustable rate mortgages, or ARMs, fell slightly to an average 4.89% from 4.95% last week.
Freddie Mac said the “5/1” ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.25%, down from 5.49% a week earlier.
Copyright 2009 Reuters Limited.