Mortgate Rates: Like A Broken Record

ASSOCIATED PRESS
Posted: September 28, 2012

WASHINGTON - Average U.S. rates on fixed mortgages fell again to new record lows. The decline suggests that the Federal Reserve's stimulus efforts may be having an impact on mortgage rates.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan had dropped to 3.40 percent. That's down from last week's rate of 3.49 percent - the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, fell to 2.73 percent, down from the record low of 2.77 percent last week.

The Fed is spending $40 billion a month to buy mortgage-backed securities. The goal is to lower mortgage rates and help the housing recovery. Fed Chairman Ben Bernanke said that the program will continue until there is substantial improvement in the job market.

Some economists expect mortgage rates to fall even further because of the Fed's bond purchases.

The housing market already is benefiting from the lowest mortgage rates on record. Sales of both previously occupied and newly built homes in the U.S. are up from last year. Home prices are rising more consistently. And builders are more confident in the market and are starting to build more homes.

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