The cost of a home loan dropped early this week on less than robust news about the economy and housing, with Freddie Mac reporting that the average interest rate for a 30-year fixed mortgage was 4.28%, down from 4.37% a week earlier.
The average for a 15-year fixed mortgage was 3.32%, down from 3.39%, Freddie Mac said Thursday in its weekly survey of what lenders are offering to solid borrowers.
The average start rate for a popular type of adjustable mortgage with a fixed rate for the first five years edged down from 3.05% to 3.03%.
Rates rose late last year when it became clear that the Federal Reserve would scale back its enormous purchases of mortgage bonds and Treasury securities, a program designed to stimulate the economy by keeping long-term rates low.
But the 30-year fixed rate has since fallen back about a quarter of a percentage point, a decline attributable at least in part to an economic recovery too weak to raise fears that inflation could become a problem.
Freddie Mac's chief economist, Frank Nothaft, noted that the news early this week included a downward revision in the fourth-quarter gross domestic product and a weaker than expected report on private-sector job growth.
Freddie Mac asks lenders each Monday through midday Wednesday about the terms they are offering creditworthy borrowers who pay less than 1% in upfront lender fees and discount points to obtain mortgages. Charges for services such as appraisals and title insurance are extra.
Actual rates fluctuate, sometimes more than once a day. Borrowers can pay additional points to obtain lower rates, or get zero-cost loans by accepting a higher rate.
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