U.S. rate on 30-year mortgage declines to 3.54 pct.

By Marcy Gordon
AP Business Writer

WASHINGTON (AP) — Average U.S. rates on fixed mortgages fell this week and remained near historic lows, a trend that has supported a recovery in housing.

Freddie Mac said Thursday that the average rate for the 30-year loan fell to 3.54 percent from 3.63 percent last week. That’s near the 3.31 percent reached in November, which was the lowest on records dating to 1971.

The average rate on the 30-year loan has been below 4 percent now for a full year.

The average rate on the 15-year fixed mortgage slipped last week to 2.72 percent from 2.79 percent last week. The record low is 2.63 percent.

The lowest mortgage rates in decades are spurring more home purchases and refinancing. That’s helped the broader economy. Increased sales are also pushing home prices higher.

As the spring home-buying season begins, low mortgage rates could spur more people to buy homes or refinance. Refinancing often lowers monthly mortgage payments and leaves consumers with more spending money.

The National Association of Realtors reported Thursday that sales increased 0.8 percent in February from January to a seasonally adjusted annual rate of 4.98 million. That was the highest sales pace since November 2009, when a temporary tax credit for home buyers had boosted sales.

Still, some people are unable to take advantage of the low mortgage rates, either because they can’t qualify for stricter lending rules or they lack the money for larger down payment requirements. First-time buyers made up just 30 percent of sales in February, the Realtors’ group said. In healthier economies, they make up more than 40 percent of sales.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday 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 percent of the loan amount.

The average fee for 30-year mortgages was unchanged at 0.8 point. The fee for 15-year loans edged down to 0.7 point from 0.8.

The average rate on a one-year adjustable-rate mortgage slipped to 2.63 percent from 2.64 percent last week. The fee for one-year adjustable-rate loans was steady at 0.4 point.

The average rate on a five-year adjustable-rate mortgage was unchanged at 2.61 percent. The fee also was steady, at 0.6 point.