WASHINGTON - Mortgage rates fell this week to the lowest level on record dating to 1971, giving consumers added incentive to lock in low payments for home purchases and refinanced loans.
The average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week, mortgage company Freddie Mac said Thursday.
That's the lowest point since Freddie Mac began tracking rates in April, 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.
Rates on 15-year, fixed-rate mortgages fell to an average 4.13 percent this week. That was the lowest on records dating to September, 1991. It was down from 4.2 percent a week earlier.
Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasurys has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasurys.
But the falling rates have yet to spark a home-buying boom - or energize the economy. New-home sales collapsed in May after home-buying tax credits expired. The economy also remains under pressure from high unemployment. And many people don't qualify under tightened lending rules.
"As long as prospective home buyers are still concerned about their jobs and their financial well-being, many of them will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com.