Mortgage rates at lowest in three decades
US mortgage rates dropped to the lowest level in more than three decades this week as the government stepped up efforts to revive the housing market.
The average rate on a 30-year fixed mortgage tumbled for a ninth straight week, to 5.10 percent from 5.14 percent a week earlier, Freddie Mac said yesterday. That's the lowest in data that go back to 1971.
The 15-year fixed rate fell to 4.83 percent from 4.91 percent, and the one-year adjustable rate dropped to 4.85 percent from 4.95 percent.
The US economy shrank at a 0.5 percent annual pace in the third quarter, the Commerce Department said last week. Economists surveyed by Bloomberg last month estimated the economy probably will contract 4.3 percent this quarter, the biggest decline since 1982, and continue contracting for the next two quarters. The US jobless rate could reach 8.2 percent at the end of this year, a 26-year high.
On Tuesday, the Federal Reserve said it will use BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co., and Wellington Management Co. to manage the purchase of $500 billion of mortgage-backed securities it announced on Nov. 25.
Home prices in 20 cities tumbled 18 percent from a year earlier in October, the fastest rate on record, according to a S&P/Case-Shiller report. Between August 2002 and April 2006, year-over-year price increases exceeded 10 percent every month.
Sales of single-family homes in November dropped 7.6 percent from the prior month, the most in two decades, the National Association of Realtors said. Resale prices fell 13 percent from a year earlier, the biggest collapse since the Great Depression of the 1930s. 