Mortgage rates nearing record lows

The average rate on 30-year fixed-rate mortgages this week continued to fall to near the 5 percent mark, close to the record low seen a month ago, Freddie Mac said.

In a separate report, the Mortgage Bankers Association said mortgage applications jumped 45.7 percent for the week ending Feb. 13 compared to the week before. The increase was largely driven by a 64.3 percent surge in applications for refinancings, but applications for purchase loans were also up a seasonally adjusted 9.1 percent.

Freddie Mac's weekly Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage falling to 5.04 percent with an average of 0.7 point for the week ending Feb. 19, down from 5.16 percent the previous week and 6 percent a year ago.

Since Freddie Mac began conducting the survey in 1971, the 30-year fixed-rate mortgage has never dipped below the 4.96 percent rate seen in mid-January.

Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation, said Frank Nothaft, Freddie Mac vice president and chief economist.

Low rates have spurred many borrowers to refinance. The refinance share of mortgage applications increased to 74.2 percent during the week ending Feb. 13, the Mortgage Bankers Association said, compared with 66.7 percent the previous week.

The 15-year fixed-rate mortgage averaged 4.68 percent with an average 0.6 point, down from 4.81 percent last week and 5.64 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 5.04 percent with an average 0.6 point, down from 5.23 percent last week and 5.37 percent a year ago.

One-year Treasury-indexed ARMs averaged 4.8 percent with an average 0.5 point, down from 4.94 percent last week and 4.98 percent a year ago.

Freddie Mac's rate survey is based on prime conventional conforming mortgages with a 20 percent down payment.

Borrowers seeking to make smaller down payments or who don't meet Freddie Mac's underwriting standards may pay higher rates, as will borrowers seeking "jumbo" loans larger than those Freddie Mac and Fannie Mae are allowed to purchase or guarantee.

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