Rate on 30-year fixed mortgage fell to 4.78%

By JANNA HERRONNEW YORK – Fixed mortgage rates dipped this week, with the rate on the 30-year loan staying under 5 percent and the 15-year loan falling below 4 percent.

Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.78 percent from 4.80 percent the previous week. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year fixed mortgage slipped to 3.97 percent from 4.02 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell earlier this week on weak business manufacturing activity in Philadelphia, Dallas and Richmond, said Frank Nothaft, Freddie’s chief economist.

Despite the low rates, housing remains in the doldrums. High unemployment and tight lending standards are preventing people from buying homes. A record number of foreclosures are forcing down home prices, leaving would-be buyers worried that prices haven’t bottomed out yet.

Four homebuilders reported softer sales in the most recent quarter. PulteGroup Inc.’s loss widened in the first three months of the year on a 17-percent drop in home sales. Its net new orders for homes edged up less than a percent. The Ryland Group Inc., M/I Homes Inc. and Meritage Homes Corp. all reported double-digit declines in new home orders, a sign of future demand.

More Americans did sign contracts to buy homes last month, the National Association of Realtors reported Thursday. But the increase wasn’t enough to bring home sales to a level economists consider healthy.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage fell to 3.51 percent from 3.61 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

The average rate on a one-year adjustable-rate loan fell to 3.15 percent from 3.16 percent. That marked the lowest level for the rate on the 1-year ARM in the last year.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.

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