Mortgage rate falls to near-record low

Associated Press

WASHINGTON

The average rate on the 30-year fixed mortgage dropped near its all-time low this week, making home-buying and refinancing a bargain for those who can qualify.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan fell to 3.88 percent from 3.98 percent. That’s just above the rate of 3.87 percent reached in February, the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular option for refinancing, plunged to a fresh low of 3.11 percent from 3.21 percent last week. The previous record of 3.13 percent was hit last month.

Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note. Last week’s disappointing report on March job growth led more investors to sell stocks and buy Treasurys, which are considered safer investments. As demand for Treasurys increases, the yield falls.

Yet the low rates are unlikely to draw in many more people looking to buy a home or to refinance their mortgage.

Some would-be buyers are still skeptical about purchasing a home with prices still falling. Home appraisals that are higher or lower than the sales price have scuttled a rising number of home contracts. Many Americans are struggling with damaged credit and unstable finances.

And mortgage rates have been below 4 percent for all but one week since early December, leaving some potential buyers and refinancers unimpressed by new record lows.

“The rates have been very attractive for some time,” said Bill Armstrong, vice president of Mackintosh Realtors in Damascus, Md. “Rates going a little higher or lower is not going to have much of an impact.”

Still, the mild winter has helped lift expectations for the housing market after four years of sluggish sales.

January and February made up the best winter for resales in five years, when the housing crisis began. And builders in February requested the most permits to construct homes in more than three years.