Mortgage rates hit low for the year on economic worries including housing

Purchase loan demand at highest level since January

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Mortgage rates hit a new low for the year this week as worries about the economy made relatively safe investments like Treasury notes and mortgage-backed securities look more attractive to investors. One of those economic worries is housing -- Federal Reserve Chairwoman Janet Yellen told lawmakers this week that housing activity has been "disappointing so far this year and will bear watching" -- but mortgage rates remain low by historic standards. Rates on 30-year fixed-rate mortgages averaged 4.21 percent with an average 0.6 point for the week ending May 8, down from 4.29 percent last week but up from 3.42 percent a year ago, according to the latest weekly survey by Freddie Mac. Mortgage rates followed 10-year Treasury yields down "after a dismal report on real GDP growth in the first quarter," said Freddie Mac Chief Economist Frank Nothaft in a statement. Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase mortgages during...