Rate on 30-year mortgage falls to record 4.09%

WASHINGTON — Fixed mortgage rates fell to the lowest level in six decades for the second straight week. But few Americans can take advantage of the historically low rates. Freddie Mac said today that the average rate on the 30-year fixed mortgage fell to 4.09 percent this week. That’s the lowest rate seen since 1951. The average rate on the 15-year mortgage, a popular refinancing option, fell to 3.30 percent, also a new low. Economists say it is likely the lowest rate on the 15-year ever. Mortgage rates tend to track the yield on the 10-year Treasury note. Worries over Europe’s debt crisis are pushing investors to shift money into safe Treasurys, forcing the yield lower. Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. That compares with five years ago, when the average 30-year fixed rate was near 6.5 percent. A decade ago, it was higher than 8 percent. Still, cheap mortgage rates haven’t helped home sales. Sales of new homes are on pace for the worst year on records dating back a half-century. The pace of re-sales is shaping up to be the worst in 14 years. Many Americans are in no position to buy. High unemployment, scant wage gains and large debt loads have kept them away. Others can’t qualify for the lowest rates. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Many repeat buyers have too little equity invested in their homes to meet loan requirements. Most people pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount. The average fees for the 30-year held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable rate loans were all at 0.6 point. To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent. That’s higher than last week’s 2.96 percent, the lowest records dating to January 2005 and the sixth straight week of record lows for this type of loan. The average rate for the one-year adjustable-rate mortgage fell to 2.81 percent from 2.84 percent. That’s the lowest on records going back to 1984.