CHICAGO - Mortgage rates for fixed 30-year loans in the United States dropped to a record low amid signs the housing market is beginning to emerge from the worst slump since the 1930s.
The rate fell to 4.71 percent for the week ended yesterday, the lowest since Freddie Mac began compiling the data in 1971. The average 15-year rate was 4.27 percent, the McLean, Va. company said yesterday.
“I don’t think they can go much lower,’’ said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio. “I think frankly they’re at one of the lowest points they’re going to achieve for a long time.’’
Low mortgage costs and a tax credit for first-time homebuyers are helping increase demand for property as the number of contracts to buy previously owned homes rose in October and mortgage applications gained last week. The highest US unemployment rate in 26 years is depriving the housing market of buyers and adding to the number of foreclosed properties for sale, helping push home prices lower.
“Home prices, we think, will fall until probably the second half of next year,’’ Celia Chen, senior director at Moody’s Economy.com in West Chester, Pa., said by telephone.
Foreclosures will probably peak in the first quarter of 2010, Chen said. Home prices are being hurt by excess inventory of homes on the market, Chen said.
