30-year mortgage keeps falling

WASHINGTON Ė Average U.S. rates for 30-year and 15-year fixed mortgages fell to fresh record lows last week. Cheap mortgage rates have made home-buying and refinancing more affordable than ever for those who can qualify.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan ticked down to 3.83 percent. Thatís the lowest since long-term mortgages began in the 1950s. And itís below the record rate of 3.84 percent reached the previous week.

The 15-year mortgage, a popular option for refinancing, dropped to 3.05 percent, also a record. Thatís down from 3.07 percent.

Low mortgage rates havenít done much to boost home sales. Rates have been below 4 percent for all but one week since early December. Yet sales of both previously occupied homes and new homes fell in March.

There have been some positive signs in recent months. January and February made up the best winter for sales of previously occupied homes in five years. And builders are laying plans to construct more homes in 2012 than at any other point in last 3Ĺ years. That suggests some see the housing market slowly starting to turn around.

Still, many would-be buyers canít qualify for loans or afford higher down payments required by banks. Home prices in many cities continue to fall. That has made those who can afford to buy uneasy about entering the market. And for those who are willing to brave the troubled market, many already have taken advantage of lower rates Ė mortgage rates have been below 5 percent for more than a year now.

Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note. Slower U.S. job growth and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasurys, which are considered safe investments. As demand for Treasurys increases, the yield falls.