Mortgage rates fell in the past week to the latest in a series of record lows amid concerns about the state of the U.S. economy, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.
Rock-bottom rates should continue to spur demand for home loan refinancing, putting extra cash into consumers' hands that they can save, use to pay off existing debt or funnel into the economy through extra spending.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.42 percent for the week ended August 19, down from the previous week's 4.44 percent and its year-ago level of 5.12 percent, according to the survey.
Thirty-year mortgage rates have fallen to fresh lows for nine straight weeks. Freddie Mac started the survey in April 1971.
Meanwhile, 15-year fixed-rate mortgages averaged 3.90 percent, down from 3.92 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991. Fifteen-year mortgage rates have hit fresh lows in six straight weeks.
"Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed mortgage rates have continued to fall," Amy Crews Cutts, Freddie Mac deputy chief economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
