US mortgage rates drop to new lows

US mortgage rates slipped to the lowest level in Freddie Mac's weekly survey, with 30-year fixed-rate loans being offered at an average of 4.15 percent while 15-year fixed-rate loans dropped to 3.36 percent.

The survey also includes mortgages made with minimal payment of fees and points to lenders. Freddie Mac said borrowers getting 30-year and 15-year loans this week would have paid 0.7 percent and 0.6 percent of the total loan amount respectively.

The rates, which are available to borrowers affected by the recession and housing crunch, are the lowest since Freddie Mac began tracking rates in 1971.

According to the National Bureau of Economic Research, long-term fixed-rate loans backed by the Federal Housing Administration (FHA) averaged 4.08 percent for several months between 1950 and 1951. FHA loans, which have additional charges, are available to borrowers who have greater credit risks than those in the Freddie Mac survey.

The US housing market remained sluggish despite record low rates. Freddie Mac economist Frank Nothaft said around 70 percent of total home loan applications in the first half were for refinancing and not home purchases.

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