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Home mortgage rates dip below 4%

New bill restores cap for FHA mortgages to

New bill restores cap for FHA mortgages to as high as $729,750. Credit: iStock

The average rate for a 30-year fixed-rate home loan took another dip, with rates falling below 4 percent for the fourth time in 2011, Freddie Mac reported Thursday.

"These low rates and home prices have pushed housing affordability to record highs," Frank Nothaft, vice president and chief economist of Freddie Mac, said in a statement. 

The average on 30-year fixed mortgages dipped to 3.99 percent for the week ended Dec. 8, while the average for 15-year fixed rate loans dropped to 3.27 percent, just slightly above its all-time low of 3.26 percent, hit Oct. 6.

In the year ended Oct. 31, 30-year fixed-rate loans have declined 0.62 percentage points, and median sales prices on existing homes are off 4.7 percent, Nothaft said. 

The low rates and prices helped raise the National Housing Affordability Index, which dates to 1971, to another record high in October, according to the National Association of Realtors. Nationally, monthly principal and mortgage interest payments accounted for just 12.6 percent of median family incomes in October, Nothaft said. Tighter access to loans, however, presents a hurdle to many potential buyers. 

This level of affordability likely contributed to the rise in conventional mortgage applications for home purchases over the week of Dec. 2 to the most in nearly a year, Nothaft said.

According to Freddie Mac, a 30-year fixed-rate mortgage averaged 3.99 percent, with an average 0.7 point paid, for the week ended Dec. 8, down from last week when it averaged 4 percent with an average 0.7 point. Last year at this time, the 30-year fixed-rate averaged 4.61 percent. A 15-year fixed-rate mortgage this week averaged 3.27 percent, with an average 0.8 point, down from last week when it averaged 3.30 percent, with an average 0.8 point. A year ago at this time, the 15-year averaged 3.96 percent.

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