Thirty-Year Mortgage Rate Falls to 4.82%: Freddie Mac

U.S. mortgage rates fell back toward record lows this week and stayed a percentage point below levels a year ago just as the important spring sales season heats up, Freddie Mac said Thursday.

Low mortgage rates are a boon for owners looking to cut monthly payments by refinancing and should attract new buyers.

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The flailing housing market is seen keeping the U.S. economy mired in recession until sales rise enough to sop up record numbers of unsold homes and put a floor under prices.

The average 30-year home loan rate fell 0.05 percentage point in the April 16 week to 4.82 percent from the prior week. A year ago, the rate was 5.88 percent.

This week's rate nearly matched the 4.78 percent seen two weeks ago that was the lowest since government-controlled Freddie Mac , the second-largest U.S. home funding company, started tracking these rates in 1971.

Lenders charged an average of 0.6 percentage point on 30-year mortgages, down from 0.7 point the prior week.

Sweeping government action to hammer down mortgage rates and breathe life into the deepest housing slump since the Great Depression is showing sporadic signs of success, economists said. Progress is choppy, however, and it is unclear how sustainable it is.

"The housing industry is starting to exhibit some positive signs, albeit scarce and too early to tell how permanent," Freddie Mac chief economist Frank Nothaft said in a statement.

Home builder confidence in April posted its biggest monthly leap since 2003, a national industry group reported on Wednesday. Buyer traffic at the start of the key spring selling season picked up as rates and prices dropped.

Applications to refinance have doubled since the end of February while 30-year loan rates tumbled by about half a percentage point, the Mortgage Bankers Association said.

With affordability at an all-time high, demand is keen from first-time buyers who are eligible for up to $8,000 in federal tax credits and some state credits as well. Investors have returned too, looking for deep discounts.

But fear of losing jobs keeps many potential buyers trepidatious, industry executives agree, and many borrowers still are unable to qualify under now more stringent lending guidelines.

"Mortgage rates are at an all-time low but you have to almost be King Midas to qualify for the loan," said Rick Sharga, senior vice president at foreclosure tracking company RealtyTrac in Irvine, California. "You need a nearly perfect credit score and job history and a significant downpayment to qualify," he said. "That wipes out a huge portion of the buying population."

RealtyTrac reported record foreclosures both in March and for the first quarter, as industry moratorium programs ended last month before federal housing rescues could take root.

Some realtors are taking innovative steps to lure buyers out of hibernation and stimulate business.

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In April, Century 21 Real Estate will give a sweepstakes winner $221,000 toward the purchase of a home.

"We felt it was time because of the marketplace to go out and help our agents drum up some business," Thomas Kunz, Parsippany, New Jersey-based chief executive of Century 21, said in a recent interview.

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