U.S. mortgage rates for 30-year loans declined for a second week, lowering borrowing costs as fewer Americans sought financing for home purchases.
The average rate for a 30-year fixed mortgage fell to 3.55 percent in the week ended today from 3.59 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15- year rate held at 2.86 percent.
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Mortage rate summaryThe numbers: The rate on the 30-year loan declined to 3.55 percent, mortgage buyer Freddie Mac says. The rate on the 15-year mortgage was unchanged at 2.86 percent. Outlook: Six weeks ago, the rate on the 30-year loan fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s. The low rates have aided a modest housing recovery this year.
Rates little changed: Average U.S. rates on fixed mortgages changed little this week and remained slightly above record lows reached earlier this year.
While interest rates that are close to record lows help support the real estate market, tight lending standards have limited growth in home sales. Mortgage applications dropped for a fifth straight week in the period ended Aug. 31, according to a Mortgage Bankers Association index. The refinance gauge fell 3 percent and the measure of purchases slipped 0.8 percent, the Washington-based group said yesterday.
The 5.3 percent decline in purchase applications for August provides "further evidence that mortgage-dependent buyers are barely contributing to the recovery in housing market activity," Paul Diggle, property economist for Capital Economics in London, wrote in a note to clients yesterday. "Without a significant easing in credit conditions, it's hard to see how this will change in the foreseeable future."
All-cash transactions accounted for about 27 percent of home sales in July, the National Association of Realtors said last month.
Demand for a shrinking supply of homes for sale has helped push up prices. The S&P/Case-Shiller index of prices in 20 cities climbed in June from a year earlier, the first such gain since September 2010.