Freddie Mac: Average 30-year mortgage rate slips to 3.97%

Happy holidays: Borrowers enjoy 30-year mortgage rates below 4% in five of last seven weeks

Low mortgage rates are on the holiday menu for home buyers, with lenders surveyed by Freddie Mac offering 30-year fixed-rate home loans this week at an average of 3.97%, down from 3.99% a week ago.

The average 30-year rate, which started 2014 at 4.5%, has been below 4% for five of the last seven weeks, according to Freddie Mac, which has published weekly reports on the 30-year loan since 1971.  

The latest survey from the bailed-out finance giant, released Wednesday, showed the average rate for a 15-year fixed mortgage was the same as last week, 3.17%. Start rates for adjustable loans also were unchanged.  

Freddie Mac’s chief economist, Frank Nothaft, described economic news in the United States as “uplifting” going into the holidays.

Third-quarter home resales topped expectations, Nothaft noted, while growth in the gross domestic product was revised up from 3.5% to 3.9%.

Fears that the improving economy would drive rates higher were tempered by expectations of slower expansion this quarter and by sluggish growth in other major countries, said Keith Gumbinger, vice president of HSH.com, which also tracks rates.

"Moderate economic growth in the U.S., minimal inflation and few profitable places for investors to park their funds are all helping American mortgage borrowers obtain fantastic rates,” he said.

Freddie Mac’s survey asks lenders about the terms of loans they are offering to borrowers who have 20% down payments and who pay half of 1% of the loan amount in upfront lender fees and discount points.

Payments for such services as appraisals and title insurance are not included. 

The survey provides a consistent gauge of mortgage trends, but actual rates adjust constantly and are influenced by many factors.

In addition to borrowers’ credit histories and debt loads, the factors include whether the borrowers opt for zero-cost loans at higher rates or pay extra to lenders initially to lower the rates.

Follow @ScottReckard for news of banks and home loans

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