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Mortgage rates still near record lows

Mortgage rates across the United States and Long

Mortgage rates across the United States and Long Island are near record lows. This home is on the market in Palo Alto, Calif. (Aug. 21, 2012) Photo Credit: AP

WASHINGTON -- Average U.S. rates on fixed mortgages changed little this week and remained slightly above record lows reached earlier this year. The low rates have aided a modest housing recovery.

Mortgage buyer Freddie Mac said Thursday the rate on the 30-year loan slipped to 3.55 percent, down from 3.59 percent last week. Six weeks ago, the rate fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s.

On Long Island, the rate on the 30-year fixed loan rose slightly to 3.78 percent from 3.73 percent, according to statistics from HSH Associates at, which prepares them weekly for Newsday.

The average on the 15-year fixed mortgage, a popular refinancing option, was unchanged at 2.86 percent. That's above the record low of 2.80 percent reached six weeks ago. On Long Island, the average on the 15-year fixed mortgage fell to 3.25 percent from 3.28 percent, the HSH Associates figures show.

The average rate on five-year adjustable rate mortgages fell to 2.75 percent from 2.78 percent.

Low mortgage rates have lifted home sales this year. Sales of newly built and previously occupied homes are well above last year's levels. Prices have increased consistently, largely because the supply of homes has shrunk while sales have risen. And builder confidence is at its highest level in five years.

On Long Island, however, home prices -- including distressed sales such as foreclosures and short sales -- fell by 0.6 percent in July 2012 compared to a year earlier, the real estate tracking firm CoreLogic said. When distressed sales were excluded from the results, prices actually fell a bit more, by 0.8 percent.

Long Island experienced a sharper rise in home prices during the bubble, and now it is suffering a more prolonged fall, said MarketWatch chief economist Irwin Kellner of Port Washington.

No matter the gains nationally, the housing market has a long way back to full health. Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million. That's well below the 5.5 million annual sales considered healthy. Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

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