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Mortgage rates remain near record lows for modern era

March 4, 2010 |  9:00 am

The typical rate that lenders were offering for 30-year home loans slipped below 5% again this week, the mortgage company Freddie Mac said in a survey released Thursday.

The survey asks lenders to report popular combinations of interest rates and points, the upfront fees borrowers pay to offset the cost of issuing the loan and sometimes to "buy down" the rate. The result is intended to reflect what people with good credit and a 20% down payment or home equity could expect to be offered.

For 30-year fixed-rate home loans, the combination this week was an average 4.97% in interest with an average of 0.7% of the loan balance in points, according to the survey, conducted Monday through Wednesday.

The low rates have been engineered by the federal government in response to the deep recession. Not since the 1950s have rates remained so low for so long, said Greg McBride, a senior financial analyst at Bankrate.com, citing data from the National Bureau of Economic Research.

The 30-year fixed loan has bumped around the 5% level since September, falling to a record low of 4.71% in a Freddie survey in December. So far this year, it's been above 5% in six of the weekly surveys and below seven times. It was at 5.05% a week ago.

The 15-year fixed-rate mortgage this week averaged 4.33% with an average of 0.7% in points, down from 4.40% a week ago.

The five-year Treasury-indexed hybrid adjustable-rate loan, which has a fixed rate for the initial five years, averaged 4.11% with 0.6% of the loan balance in points. It averaged 4.16% a week earlier.

Because the Freddie Mac survey assesses lenders' offering prices, mortgage professionals say well-qualified borrowers often negotiate slightly better deals. The rate research website FreeRateUpdate, for example, said rates have held steady this week at 4.75% for a 30-year fixed loan for borrowers paying points of 0.7% to 1.0%.

Despite the low rates and thousands of dollars in special tax credits for home buyers, a report Thursday from the National Assn. of Realtors suggested that demand for housing is lagging. The real-estate group said its index of sales agreements for existing homes fell in January to the lowest level since last April, a trend that "raises concern about the strength of a recovery."

-- E. Scott Reckard

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