30-year mortgage rates decline again

Associated Press / February 19, 2010

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WASHINGTON - Rates for 30-year home loans edged lower for the second straight week, but remained above last year’s record lows.

The average rate on a 30-year, fixed-rate mortgage was 4.93 percent this week, down from 4.97 percent a week earlier, mortgage finance company Freddie Mac said.

Rates dropped to a record low of 4.71 percent in early December, pushed down by an aggressive government campaign to reduce consumers’ borrowing costs.

Freddie Mac collects mortgage rates Monday through Wednesday of each week from US lenders. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

Mortgage rates have been at or near record lows due to a $1.25 trillion Federal Reserve program to buy up mortgage securities. That program is scheduled to run out at the end of March, but the Fed has held the door open to extending it if the economy weakens.

Some analysts fear that once the program ends, mortgage rates could spike due to a lack of willing buyers of mortgage investments, hurting the recovery in housing and the economy.