The 30-year mortgage rate fell once again, down to a record low, offering a great opportunity for those who can afford to buy or refinance their homes.
For example, Freddie Mac said Thursday the average rate fell to 3.89 percent. That’s below the previous record of 3.91 percent reached three weeks ago.
Records for mortgage rates date back to the 1950s.
The average on a 15-year fixed ticked down to 3.16 percent. That’s down from a record 3.21 percent three weeks ago.
Rates are lower because they track the yield on the 10-year Treasury note, which fell below 2 percent. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.
Average fixed rates hovered around 4 percent at the end of 2011. Yet many Americans either can’t take advantage of the rates or have already done so.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Applications have fallen slightly on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association.
Frank Nothaft, Freddie Mac’s chief economist, said that until hiring picks up and unemployment drops significantly, the impact of lower rates will remain muted.
Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.
Builders hope that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose in December to its highest level in more than a year.
But so far, they have had little impact on the depressed housing market.