Mortgage rates continued their slide toward record lows this week as fallout from the European debt crisis and dormant inflation proved to be boons for Americans buying or refinancing homes.
Investor flight to the safety of U.S. government securities has pushed yields down on Treasury bonds. And mortgage rates have followed, with lenders offering an average interest rate of 4.84% on 30-year fixed-rate home loans, mortgage giant Freddie Mac reported Thursday.
That was down from 4.93% a week earlier and the lowest average rate since December.
The lenders surveyed by Freddie Mac this week were offering 4.24% on average for fixed-rate, 15-year home loans. That’s the lowest level at least as far back as August 1991, when Freddie Mac began tracking rates on 15-year loans.
For both 30-year and 15-year loans, lenders were charging upfront fees equal to 0.7% of the amount borrowed.
Loan rates also have been pushed down by a U.S. inflation rate that the government said Wednesday had dropped to a 44-year low of about 1% over the last 12 months.
The low interest rates, a stabilization of home prices and the federal government’s temporary home buyer tax credits have reinvigorated business for Laguna Niguel loan broker Jeff Lazerson, who said he had “one foot in the mortgage broker graveyard” for most of the first quarter of this year.
“My business is back from the dead,” he said, adding that the expiration of the tax credits at the end of April hadn’t dampened business.
The Freddie Mac survey asks lenders the loan rates they are offering to well-qualified buyers able to make at least a 20% down payment or who have 20% equity in their homes if they are refinancing.