By Noah Rayman
NEW YORK - U.S. mortgage rates for 30-year fixed loans declined to a record low, reducing borrowing costs amid an uneven recovery in the housing market.
The average rate for a 30-year fixed mortgage fell to 3.66 percent in the week ended today from 3.71 percent, Freddie Mac said in a statement. It was the lowest in the McLean, Va.- based mortgage-finance company’s records dating to 1971. The average 15-year rate dropped to 2.95 percent from 2.98 percent.
Low borrowing costs have helped to support the real estate market as house prices stabilize. Demand for homes remains choppy, with sales of previously owned houses falling 1.5 percent in May from the previous month, according to a report today from the National Association of Realtors.
“This may be a little bit of a setback, but the underlying picture is still one of improvement,” Paul Diggle, property economist for Capital Economics Ltd., said today in a telephone interview from London.
U.S. house prices rose in April for a third straight month, the Federal Housing Finance Agency reported today. Prices climbed 0.8 percent from March and 3 percent from a year earlier.
Construction of single-family houses increased for a third straight month in May, and building permits rose to the highest level since September 2008, Commerce Department data show.
Mortgage rates have been low in part because of a Federal Reserve program designed to bring down long-term interest rates by replacing short-term bonds with longer-term debt. The Fed said yesterday it would expand the program, called Operation Twist, through the end of the year.
A measure of refinancing applications rose 1 percent in the week ended June 15 to the highest level since April 2009, the Washington-based Mortgage Bankers Association said yesterday. The group’s purchasing index dropped 8.5 percent after jumping almost 13 percent the previous week.