March 05--Mortgage interest rates fell for the first time in four weeks, with Freddie Mac's survey showing lenders offering conventional 30-year fixed-rate loans at an average of 3.75%, down from 3.8% a week ago.
The 15-year fixed-rate home loan, a way to build equity and pay off debt faster, was averaging 3.03% compared to 3.07%, according to the survey, released Thursday.
A downward revision of fourth-quarter economic growth figures and a decline in consumer prices contributed to the easing of rates, said Len Kiefer, the deputy chief economist at Freddie Mac.
Rates for fixed 30-year loans have remained below 4% since late November, remarkably low by historical standards. They are now at levels last seen in May 2013, Freddie Mac said.
However, high prices and tight supplies in many housing markets have offset the benefits of cheap money for those who can qualify for loans.
Nationally, sales of previously owned homes fell in January to their lowest level in nine months and sales of new homes have plateaued. Southern California had a slow start to the year, with sales dropping and prices flat.
In a more upbeat report, a trade group said Thursday that mortgage credit availability increased slightly in February.
A Mortgage Bankers Assn. index was at 118.6, compared with a baseline of 100 in March 2012, when lending standards were drum-tight. The number rises when credit loosens.
The MBA's chief economist, Michael Fratantoni, attributed the latest easing to increased availability of jumbo mortgages and of Fannie Mae-backed loans requiring down payments of only 3%.
Freddie Mac is to begin backing mortgages with just 3% down this month, Fratantoni noted.
Freddie Mac asks lenders each Monday through Wednesday about the terms they are offering on mortgages of up to $417,000 that can be backed by Freddie and Fannie, the finance giants that jointly guarantee about 60% of U.S. home loans.
The borrowers in Freddie Mac's survey are assumed to have 20% down payments and to pay about 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.
