Average rates for fixed mortgages in the US dropped to new record lows for the second consecutive week, resulting in a rise in the number of homeowners looking to refinance, media reports said.
According to Freddie Mac, the average rate for 30-year fixed-rate loans fell to 3.36 percent this week from last week’s 3.40 percent, which was the lowest since long-term mortgages began in the 1950s.
At the same time, the average rate for 15-year fixed-rate loans dipped to 2.69 percent from last week’s previous record low of 2.73 percent.
Mortgage rates started falling after the Federal Reserve started buying mortgage securities to boost the US housing recovery, more commonly known as QE3. The central bank will continue the practice until there is significant improvement in the job market.
Moreover, the lower rate is encouraging borrowers to refinance. Just last week, mortgage applications grew by 16.6 percent. Out of those applications, 83 percent were to refinance existing mortgages, according to the Mortgage Bankers Association.
However, some economists are doubtful whether a further decline in loan rates will make a big difference.
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