WASHINGTON (AP) — The average rate on the U.S. 30-year fixed mortgage last week dipped closer to the lowest on record, a trend that is making home buying more affordable and also enabling more Americans to refinance their loans.
Mortgage buyer Freddie Mac says the average rate on a 30-year loan declined to 3.35 percent from 3.37 percent last week. That's not far from the 3.31 percent rate of about a month ago, the lowest on records dating to 1971.
The average on the 15-year fixed mortgage was unchanged at 2.65 percent. The record low is 2.63 percent.
The 30-year fixed mortgage rate averaged 3.66 percent this year, Freddie Mac said, the lowest annual average in 65 years.
Frank Nothaft, chief economist at Freddie Mac, said the average 30-year rate has fallen 0.6 percentage points this year. That would save a homeowner about $98,000 in interest payments over the life of a $200,000 loan, he said.
The Federal Reserve is purchasing about $85 billion each month in Treasury bonds and mortgage-backed securities in an effort to push down long-term interest rates.
In a separate report, the Commerce Department said that sales of new homes jumped 4.4 percent in November to a seasonally adjusted annual rate of 377,000. That is the fastest pace in more than two and a half years and the latest sign the housing recovery is sustainable.
Continue reading this story on the...