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Mortgage rates hit an all-time low, according to a report released by Freddie Mac on Thursday. A 'sale pending' sign is displayed in front of a home for sale May 24, 2010 in San Rafael, California. (Justin Sullivan/Getty Images)
Mortgage rates hit record lows, falling to record lows for the 30-year and 15-year-fixed-rate loans, according to Freddie Mac on Thursday.
The 30-year-fixed-rate loan fell down to 4.44 percent, down from 4.49 percent last week. During the same time last year, the 30-year-fixed-rate loan averaged 5.29 percent.
The 15-year-fixed-rate loan fell to 3.92 percent, down from 3.95 percent last week. It was 4.68 percent at this time last year.
Freddie Mac began keeping records of mortgage rates in 1971 and this week, ending Aug. 12, has the lowest mortgage rates on record.
With a weakened economic outlook and unemployment stagnating at 9.5 percent in July, analysts say mortgage rates are being driven down.
“Private payrolls increased by 71,000 jobs in July, below the market consensus forecast, and revisions shaved June's growth by 34,000 workers,” said Frank Nothaft, the vice president and chief economist for Freddie Mac, in a statement. “The Federal Reserve also noted in its August 10th policy statement that the pace of recovery in output and employment slowed since its last meeting in June.”
The decline in mortgage rates means that home purchasers will be able to pay less when borrowing, increasing demand to refinance loans and purchase homes.
However, due to the unemployment rate, weakened consumer confidence, and restrictions on lending, consumers have been less interested in buying new homes.
