Mortgage Rates in the U.S. Decline to Lowest on Record

May 31, 2012

Mortgage rates for 30-year U.S. loans fell to a record low for a fifth straight week as concern about Europe's worsening financial crisis drove investors to the safety of the government bonds that guide borrowing costs.

The average rate for a 30-year mortgage dropped to 3.75 percent in the week ended today from 3.78 percent, Freddie Mac (FMCC)said in a statement. It was the lowest in the McLean, Virginia-based mortgage-finance company's records dating to 1971. The average 15-year rate declined to 2.97 percent, also a record, from 3.04 percent.

Yields for 10-year U.S. Treasuries, a benchmark for home loans, hit an all-time low yesterday as Spain struggled to rescue its troubled banks, adding to signs that the European debt crisis is spreading to the region's larger economies. Low borrowing costs are helping to provide a foundation for the stabilizing U.S. real estate market after a six-year slide in home prices.