LOS ANGELES – Responding to sluggish economic and housing data, mortgage rates have fallen for the seventh straight week, following the yield on Treasury bonds to new lows for the year.
But many people remain on the sidelines of the housing market, expecting further price declines or unable to refinance their existing home because they have little or no remaining home equity.
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The yield on the 10-year Treasury note, a benchmark for home lending rates, dropped below 3 percent Wednesday for the first time since early December as investors sought safety in bonds backed by Uncle Sam. And mortgage rates also fell to levels not seen since then, according to the widely watched Freddie Mac survey of lender offering rates.
Freddie Mac said Thursday that the typical rate for a 30-year fixed-rate home loan declined to 4.55 percent this week from 4.60 percent a week earlier. Not since the week of Dec. 2, when the survey showed the 30-year mortgage at 4.46 percent, have rates in the survey been lower.
The 15-year fixed loan averaged 3.74 percent in the latest survey, down from 3.78 percent a week ago and the lowest since Nov. 11, when it was 3.57 percent.
Borrowers in the survey would have needed good credit and 20 percent down payments or 20 percent home equity in the case of refinancing to obtain the rates. They would have paid 0.6 percent of the loan amount on average in upfront lender fees to obtain the 30-year loan and 0.7 percent for the 15-year loan, Freddie Mac said.
Declining rates such as those might be expected to increase the number of people seeking to lower the cost of their home loans by refinancing. Last fall, when the typical 30-year rate in the Freddie Mac survey dipped briefly below 4.2 percent on two occasions, refinance applications surged.
So is that starting to happen again?
“Not yet,” said Jeff Lazerson, a mortgage broker in Laguna Niguel, Calif., “but I am praying to the mortgage gods.”
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