U.S. mortgage rates fell for a second week to the lowest on Freddie Mac records as a slowing economy and concerns that Europe’s debt crisis is worsening drove investors to the relative safety of Treasury bonds.
The average rate for a 30-year fixed loan dropped to 4.09 percent in the week ended today from 4.12 percent, Freddie Mac said in a statement today. That’s the lowest in the McLean, Virginia-based company’s records dating back to 1971. The average 15-year rate fell to 3.30 percent from 3.33 percent.
Yields on 10-year Treasuries, a benchmark for consumer loans including mortgages, are near all-time lows amid signs that the U.S. economic recovery has stalled and the euro region is struggling to contain its debt burden. Low borrowing costs have done little to improve the housing market as foreclosures mount and the unemployment rate remains above 9 percent.
Falling rates are “helping a little but not as much as you would expect, given how low they are,” Celia Chen, a housing economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a phone interview. “The central problem right now is that job growth has slowed to almost zero.”
No new jobs were added in August, the Labor Department said Sept. 2. The unemployment rate remained at 9.1 percent for a second straight month.
Default notices sent to delinquent homeowners surged 33 percent in August from the previous month, according to RealtyTrac Inc. Total foreclosure filings, which also include auction and home-seizure notices, rose 7 percent from a four- year low in July, the Irvine, California-based data company said today.
Lowest Since 1950s
Data from the National Bureau of Economic Research measuring Federal Housing Administration loans indicate that long-term borrowing costs are the lowest since the 1950s, according to Chad Wandler, a spokesman for Freddie Mac.
Mortgage applications rose for the first time in four weeks as rate declines encouraged purchases and refinancing, according to the Mortgage Bankers Association. A gauge of refinancing climbed 6 percent in the week ended Sept. 9, while the purchase index gained 7 percent, the Washington-based group said yesterday.
© Copyright 2016 Bloomberg News. All rights reserved.