WASHINGTON - The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs.
The rate, published yesterday by Freddie Mac, is the lowest since the mortgage finance company began tracking the data in 1971. The previous record of 4.78 percent was set during the week ending April 30 and matched last week.
Despite the government support, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.
Freddie Mac collects mortgage rates from lenders across the country. Rates often fluctuate significantly, even within a given day, often tracking yields on long-term Treasury bonds.
This week's drop reflects a rush of investors into the security of government debt after concerns about financial trouble in Dubai drove investors to safe harbors. But rates climbed back later in the week, and analysts say they are likely to remain volatile.
About 11 million households, or 23 percent of homeowners with a mortgage, owe more on their home loans than their house is currently worth, according to First American CoreLogic, a real estate information company.
That makes refinancing difficult.
The average rate on a 15-year fixed-rate mortgage fell to a record low of 4.27 percent from 4.29 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, up from 4.18 percent a week earlier.
Rates on one-year, adjustable-rate mortgages fell to 4.25 percent from 4.35 percent.
The rates do not include add-on fees known as points.
One point is equal to 1 percent of the total loan amount.38.89037 -77.03196 The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs.