Average mortgage rates dip to 3.56 percent, perhaps bolstering recovery
WASHINGTON — Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.
Mortgage buyer Freddie Mac said the average rate on the 30-year loan fell to 3.56 percent. That’s down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week’s previous record of 2.89 percent.
The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.
Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects.
Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations and other improvements that help growth.
Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks. And the sluggish job market could deter some from making a purchase this year.
