New York (AP) - Rates on fixed mortgages dropped to their lowest levels in decades this week after the Federal Reserve unveiled a massive bond-buying program to help spur economic growth.
Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That's the lowest on records dating back to 1971.
The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.
The Fed detailed plans last week to buy $600 billion in Treasury bonds. On Wednesday, the central bank gave more details, saying it plans to purchase $105 billion in Treasurys over the next month. The extra demand means Treasurys will produce lower yields for investors. Mortgage rates tend to track those yields.
Mortgage rates have been at or near historic lows since April as investors, concerned about the health of the global economy, shift their money into Treasurys, pushing down rates on the bonds and consumer and business loans.
While more borrowers have refinanced their home loans, low rates have done little to boost the beleaguered housing market. Would-be buyers remain on the sidelines, too worried about their jobs or unable to qualify for a loan because of tighter credit standards. Others can't sell their own homes before buying another.
Home sales were the worst in decades this summer, and home prices fell in half of U.S. cities in the third quarter, the National Association of Realtors said Thursday.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.25 percent, down from 3.39 percent a week earlier. It is the lowest rate on records dating back to January 2005.
Rates on one-year adjustable-rate home loans were unchanged at 3.26.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.
The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.