WASHINGTON – The average U.S. rate for the 30-year fixed mortgage fell to a record low for a fourth straight week. Cheap mortgages have helped boost home sales modestly this year.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dipped to 3.78 percent. That’s down from 3.79 percent last week and the lowest since long-term mortgages began in the 1950s.
The average rate on a 15-year fixed mortgage, a popular option for refinancing, held steady at 3.04, matching the record low hit last week.
The average rate on the 30-year loan has been below 4 percent since early December. Lower rates are a key reason the housing industry is showing signs of a recovery five years after the bubble burst.
In April, sales of both previously occupied homes and new homes rose to near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.
A better job market has also made more people open to buying a home. Employers have added 1 million jobs in the past five months. The unemployment rate has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Still, the pace of home sales remains well below healthy levels.
Many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Some would-be homebuyers are holding off because they fear that home prices could keep falling.
To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.