Mortgage rates dip, remain below 5%
WASHINGTON – Rates on 30-year mortgages inched downward this week, remaining below 5 percent for the 10th-consecutive week and just above record lows.
Mortgage finance giant Freddie Mac said yesterday average rates on 30-year fixed-rate mortgages dipped slightly to 4.82 percent this week, down from an average of 4.86 percent last week.
The record low of 4.78 percent was recorded on the weeks of April 2 and April 30. Freddie Mac’s survey dates to 1971.
Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said its index of application volume climbed 2.3 percent last week from a week earlier.
Applications to refinance existing loans made up nearly 75 percent of all applications.
To revive the economy, the Federal Reserve has cut its key interest rate to a record low near zero and is expected to hold it there well into next year.
The Fed at its meeting in March launched a $1.2 trillion economic revival effort. It agreed to starting buying up to $300 billion worth of government debt over the next six months and to boost purchases of mortgage securities and debt from Fannie Mae and Freddie Mac.
At the April meeting, some Fed policy makers said additional purchases “might well be warranted at some point to spur a more rapid pace of recovery,” according to documents released Wednesday.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year.
The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent this week from 4.52 percent last week, according to Freddie Mac.