Lenders were offering fixed-rate 30-year home loans to solid borrowers at an average of 3.34% this week, the latest in a series of record low mortgage rates, according to home finance giant Freddie Mac.
The borrowers would have paid 0.7% of the loan amount to the lender in upfront fees and discount points to obtain the rate, Freddie said Thursday in its weekly report. The previous record low, set the first week of October, was 3.36% with 0.6% in fees and points.
The typical rate on a 15-year fixed mortgage of 2.65% with 0.7% in lender fees also was a record, a notch below the previous record low of 2.66% in mid-October.
Concerns over recession in Europe and the looming U.S. "fiscal cliff" of higher taxes and cuts in government spending have sent investors scurrying out of stocks and into the relative safety of Treasury securities. The yield on the 10-year Treasury note, a benchmark for fixed-rate mortgages, fell below 1.6% Thursday for the first time since early September.
The rates are falling at a time of increasing consumer confidence, helping to drive a recovery in the housing markets, with home sales and prices on the rise in many markets, including Southern California.
The improving economy and tighter lending standards have sent the number of past-due loans to the lowest level since 2008, with foreclosures also down sharply, the Mortgage Bankers Assn. said in a separate report Thursday.
However, the delinquency rate is still four times the long-term average, Michael Fratantoni, the trade associations vice president or research and economics, cautioned in an interview.
The widely followed Freddie Mac survey asks lenders across the nation early each week to report popular combinations of rates and points they are offering to borrowers with good credit scores, solid income and 20% down payments or equivalent home equity if they are refinancing.
Third-party costs such as appraisals and title insurance are extra, and solid borrowers often can find slightly better rates by shopping around.