Mortgage rates flat after hitting yearly low

Mortgage rates flat after hitting yearly low
By Derek Kravitz


Fixed mortgage rates stayed roughly flat after falling for eight weeks.

The average rate on the 30-year loan ticked up from a yearly low of 4.49 percent to 4.50 percent, Freddie Mac said Thursday. The average rate on the 15-year fixed mortgage, a popular refinance option, fell to 3.67 percent from 3.68 percent. That's a low for the year.

Rates tend to track the yield on the 10-year Treasury note. The 10-year yield has been dropping as fears over that economic recovery is slowing.

Most people can't take advantage of the low mortgage rates because they can't meet tougher lending requirements. And many who could afford to refinance likely did so last year, when rates fell to their lowest levels in decades.

Sales of new and previously occupied homes rose in April. But sales are well below healthy levels as waves of foreclosures have pushed prices down. Many would-be buyers are holding off, worried that prices have yet to bottom out.

And prices are expected to keep falling until the glut of foreclosures for sale is reduced, companies start hiring in greater numbers, banks ease up on their tougher lending rules and more people think it makes sense to buy a house again. In some areas of the country, that could take years.

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


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