12 May 11 Home Loan Rates Decrease to Lowest Level in 5 Months

Interest rates for mortgages in the U.S. fell for a fourth week, sending home loan costs to the lowest level since December. According to Freddie Mac, the average rate on a 30-year fixed rate mortgage fell to 4.63 % in the week ended today from 4.71%. That is the lowest since the week ended Dec. 9. The 15-year rate slipped to 3.82% from 3.89% a week ago, the mortgage-giant said.

Dropping home loan rates helped drive demand for home loans last week and encouraged homeowners to reduce their monthly payments. The Mortgage Bankers Association’s measure of refinance loans rose 9% in the week ended May 6, the biggest increase in two months. MBA said the Home purchase mortgage applications increased 6.7%.

On My 20th, the National Association of Realtors said, “The U.S. housing market is struggling to recover as unemployment hovers at 9%. House prices dropped in 118 of 153 cities as foreclosures that sell at cut-rate prices devalued real estate. According to Freddie Mac the average rate for a 30-year fixed home mortgage is below where it was last year at this time, when it was 4.93%. It fell to a record 4.17% in November.