Average US rate on 30 year mortgage falls to 3.92%

Average long-term U.S. mortgage rates fell this week amid continued turbulence in global stock markets.

It was the second straight weekly decline for the rate on the key 30-year loan. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage dipped to 3.92 per cent from 3.97 per cent a week earlier. That rate has increased from its 3.66 per cent average a year ago but remains well below its historic average of 6 per cent.

The average rate on 15-year fixed-rate mortgages eased to 3.19 per cent from 3.26 per cent.

The tumult in stock markets around the world that started off the year, triggered by economic stability in China, continued in the latest week. That has pushed up prices of U.S. government bonds, depressing their yields, which mortgage rates track.

The yield on the 10-year Treasury bond fell to 2.09 per cent Wednesday from 2.17 per cent a week earlier. The yield slipped further to 2.06 per cent Thursday morning.

The declining mortgage rates have spurred more prospective homebuyers to apply for loans. Mortgage applications, including refinancings, jumped 21.3 per cent in the week ended Jan. 8 from one week earlier, according to data from the Mortgage Bankers Association.

The association's seasonally-adjusted mortgage purchase index _ which rose 18 per cent in the latest week _ reached its second-highest level since May 2010.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 per cent of the loan amount.
 
The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan remained at 0.5 point.

The average rate on five-year adjustable-rate mortgages fell to 3.01 per cent from 3.09 per cent; the fee slipped to 0.4 point from 0.5 point.


Associated Press