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New Record Lows For Mortgage Rates

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WASHINGTON – Average rates for 30-year and 15-year fixed mortgages fell to new record lows this week.
Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year loans fell to 3.84%, lowest since long-term mortgages began in the 1950s. That’s below the previous record of 3.87% in February.
The 15-year mortgage, a popular option for refinancing, dropped to 3.07%, also a record. The previous record of 3.11% was hit three weeks ago.
Cheaper mortgage rates haven’t done much to boost home sales. Rates have been below 4% for all but one week since early December. Yet sales of both previously occupied homes and new homes fell in March.
Analysts suspect some of that weakness reflected a warm winter, which pulled sales into January and February that would normally occur later, in the spring buying season.

Still, many potential buyers can’t qualify for loans or afford higher down payments required by banks. Home prices in many cities continue to fall, making those that can afford to buy uneasy about entering the market. And many who can afford to buy or refinance have already taken advantage of lower rates.
Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note. Mixed news on theU.S. economy and Europe’s debt crisis have led investors to buy more Treasurys, which are considered safe investments. As demand for Treasurys increases, the yield falls.

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