Mortgage Rates On 30-Year U.S. Home Loans Fall To 5 Percent

fmmU.S. mortgage rates fell to the lowest since March as investors stepped up buying the safest types of bonds, including Treasuries and debt tied to home loans. Rates for 30-year fixed loans dropped to 5 percent in the week ended today from 5.06 percent last week, Freddie Mac said in a statement. The average 15-year rate was 4.36 percent, the McLean, Virginia-based mortgage finance company said. The fiscal crisis in Greece is pushing investors to buy U.S. Treasuries, whose yields serve as a benchmark for other debt. The yield on the 10-year Treasury note was 3.5407 percent compared with 3.7243 a week ago. Yields on government-supported bonds tied to home loans are tracking that decline, so mortgage lenders can lower rates and still sell the loans to Freddie Mac and Fannie Mae at a profit. Cheaper loan costs may blunt a decline in home buying anticipated because a government tax credit for house purchases expired April 30.

U.S. home sales rose in March as buyers took advantage of the tax break. New home sales surged 27 percent in March, the biggest gain since recordkeeping began in 1963, the Commerce Department said April 23. The index of signed purchase agreements to buy previously owned homes rose 5.3 percent in March, the National Association of Realtors said May 4.

The Mortgage Bankers Association’s index of mortgage applications rose 4 percent in the week ended April 30. The portion of refinancings fell 2.1 percent. Applications to purchase a home gained 13 percent. Bloomberg.

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