Alan Zibel, AP Real Estate Writer
USA Today
WASHINGTON — Rates for 30-year home loans inched downward this week, first decline in a month, but remained above last month’s record lows.
The average rate on a 30-year fixed mortgage was 5.09% this week, down from 5.14% a week earlier, mortgage company Freddie Mac said Thursday.
Rates dropped to a record low 4.71% in early December, pushed down by an aggressive government campaign to reduce consumers’ borrowing costs, but then rose steadily the rest of the month.
The average rate on a 15-year fixed-rate mortgage fell to 4.5% this week, from 4.54% last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.44%, unchanged from a week earlier. Rates on one-year, adjustable-rate mortgages fell to an average 4.31% from 4.33%.
The rates do not include add-on fees known as points. One point is equal to 1% of the total loan amount.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year and 15-year loans and 0.6 point for five-year and one-year loans.
Freddie Mac collects mortgage rates Monday through Wednesday each week from lenders around the country. Rates often fluctuate significantly, even within a day, often in line with interest rates on long-term Treasury bonds.
The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out in the spring. The goal of the program is to make home buying more affordable and prop up the housing market.
The central bank’s policymakers have been conflicted about whether to expand or cut back a program intended to drive down mortgage rates and bolster the housing market, according to meeting minutes released Wednesday.
Some Fed policymakers argued that the program might need to be expanded and extended beyond its current end date of March 31, arguing that the additional dose of stimulus would be especially needed if the economic recovery were to weaken.
However, one member thought the program could be scaled back given the improvement in economic and financial conditions.
Getting the housing market back on firm footing is key to a lasting recovery. The collapse of the housing market, which dragged down home prices, was the catalyst for the longest and worst recession to hit the country since the 1930s.
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