Mortgage Rates Drop Again to Record Lows

WASHINGTON (AP) – Average rates on 30-year and 15-year fixed mortgages this week fell to record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year. Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67%. That's down sharply from 3.75% last week and the lowest since long-term mortgages began in the 1950s. The 15-year mortgage, a popular refinancing option, declined to 2.94%. That's down from 2.97% last week. Rates on the 30-year loan have been below 4% since early December. The low rates are a key reason the housing industry is showing modest signs of a recovery this year. A drop in rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. A Federal Reserve survey issued Wednesday showed the economy growing moderately in most regions of the country this spring as companies continued hiring. Manufacturing and home sales improved in most of the Fed's 12 regional districts, as did residential and commercial construction. In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year. Mortgage applications rose by 1.3% during the week ended June 1, the Mortgage Bankers Association reported Wednesday, mainly because more people applied to refinance their homes.