30-Year Mortgage Rates Have Never Been Lower

Charlotte Mortgage RatesIf you’re thinking about buying a home, now might be the perfect time. There is lots of inventory on the market, including new foreclosures and interest rates are at record lows.

Average U.S. interest rates on 30-year and 15-year fixed mortgages slid to record lows again this week, with the 15-year loan falling below 3 percent for the first time ever.

Low rates have helped perk up the prospect for home sales this year. They have made home-buying and refinancing more appealing to those who can qualify.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 3.75 percent. That’s down from 3.78 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a common refinancing option, dropped to 2.97 percent. That’s down from 3.04 percent last week.

Rates on the 30-year loan have been below 4 percent since early December. The reduced rates are a primary reason the housing industry is showing modest signs of a recovery this year.

A drop in rates could also provide some help to the economy if more consumers refinance. When folks refinance at lower rates, they pay less interest on their loans and have more money to spend.

In April, sales of both residential resales and new homes rose near two-year highs. Builders are gaining more trust in the market, breaking ground on more homes and seeking more permits to build single-family homes later on this year.

A more suitable job market also made more people open to buying a home. Companies have added 1 million jobs in the past five months. Unemployment has gone down a full percentage point since August, from 9.1 percent to 8.1 percent in April.

Still, the pace of home sales continues being well below healthy levels. Economic experts say it could be several years before the market is fully recovered.

Many individuals are having trouble qualifying for home loans or can’t afford bigger down payments demanded by banks. Some prospective home buyers are hanging back because they fear that home prices could keep tumbling.

Mortgage rates have been descending because they tend to track the yield on the 10-year Treasury note, which has succumbed this week to a 66-year low. Skepticism about how Europe will work through its debt crisis has led investors to buy more Treasury securities, which are viewed as safe investments. As demand for Treasurys rise, the yield falls.

To determine average rates, Freddie Mac surveys lenders across the nation on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most consumers must pay to receive the lowest rates. One point equals 1 percent of the loan amount.

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