30-Year Mortgage Rates Drop Below 5 Percent - Real Estate * US * News * Story

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30-Year Mortgage Rates Drop Below 5 Percent

Published: Thursday, 5 Nov 2009 | 11:35 AM ET

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By: Reuters

U.S. mortgage rates fell below 5 percent for the first time in three weeks, a key level that may boost home home loan demand and help the hard-hit housing market recover, a closely watched mortgage survey showed Thursday.

Mortgage rates down

Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.98 percent for the week ending Nov. 5, down from the previous week's 5.03 percent, according to a survey released on Thursday by home funding company Freddie Mac [FRE Loading... () ].

Many industry experts view 5 percent as a key psychological level. When rates drop below this threshold, home loan demand tends to rise, while the opposite holds true when rates rise. A year ago, 30-year mortgage rates averaged 6.20 percent.

The mortgage rate is still significantly higher than the record low of 4.78 percent set the week ending April 2. Freddie Mac started the survey in 1971.