Mortgage rates tick up to 4.24%, still near record low

Posted by Emily Ray-Porter Group on Thursday, November 4th, 2010 at 12:28pm.

WASHINGTON (AP) — Rates on 30-year fixed mortgages edged up this week to an average of 4.24%, but they are still close to their lowest level in decades.

The average rate for 30-year fixed loans rose from 4.23% the previous week, mortgage buyer Freddie Mac said Thursday. It was the third weekly increase in a row.

Rates fell last month to 4.19%, the lowest average on records dating back to 1971.

The average rate on 15-year fixed loans fell to 3.63% this week from 3.66% a week earlier.

Rates have been at or near historic lows since April. Nervous investors are buying up ultra-safe Treasury bonds. Bond buying picked up in recent weeks as investors prepared for the Federal Reserve's announcement yesterday of a plan to buy billions of dollars in Treasury bonds. The goal is to spur consumer spending and investment in stocks.

The extra demand for bonds means investors must accept lower yields on Treasury bonds. Mortgage rates tend to track Treasury yields.

Low rates have been little help for the struggling housing market, which recorded its worst summer in more than a decade. However, they have spurred homeowners to refinance their home loans at lower rates.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country Monday through Wednesday each week. Rates often fluctuate significantly, even within a single day.

Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.39%, down from 3.41% a week earlier. It is the lowest rate on records dating back to January 2005.

The rates do not include add-on fees, known as points. One point is equal to 1% of the total loan amount.

The average fee for 30-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and 15-year mortgages and 0.6 point for five-year mortgages.



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