Rates on 30-year mortgages tie record low

Rates on 30-year mortgages tied a record low this week, spurring refinancing activity as the troubled housing market moves closer to possibly hitting the bottom, Freddie Mac said Thursday.

Average rates on 30-year fixed mortgages, the most popular loan among home buyers, slid to 4.78 percent from 4.8 percent last week, Freddie Mac said. Last year at this time, the average rate on a 30-year mortgage was 6.06 percent.

The all-time low of 4.78 percent was recorded the week of April 2. Freddie Mac's annual survey dates back to 1971.

Low mortgage rates have led to more refinancing activity since rates first fell dramatically in the winter. Rates slid again after the Federal Reserve said last month it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.

Frank Nothaft, Freddie Mac's chief economist, said the low rate means that those who refinance a $200,000 loan would save almost $212 in monthly mortgage payments and more than $2,500 per year.

Borrowers who refinanced during this year's first quarter reduced their mortgage payments by about $2.5 billion over the coming year, and half of borrowers who refinanced lowered their annual interest rate by at least 20 percent, according to Freddie Mac's quarterly Refinance Report.

With inventories apparently dropping and affordability rising, there are some positive signs, Freddie Mac said.

"The housing market may be edging toward a bottom," Nothaft said.

Freddie Mac also said the average rate on a 15-year fixed-rate mortgage was 4.48 percent this week, unchanged for the third straight week.

Rates on five-year, adjustable-rate mortgages fell to 4.80 percent from 4.85 percent last week - the lowest since Freddie Mac began tracking it in January 2005.

Average rates on one-year, adjustable-rate mortgages fell to 4.77 percent from 4.82 percent last week.

The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for every type of mortgage mentioned in Freddie Mac's survey except for the five-year adjustable rate mortgage, which averaged 0.6 point.

Freddie Mac collects mortgage rates from lenders around the country. Rates can fluctuate significantly.