Interest rates for U.S. home mortgages dropped last week for the first time in two-and-a-half months in the wake of soothing comments from Federal Reserve Chairman Ben Bernanke, but demand for home loans still fell.
Fixed 30-year mortgage rates averaged 4.58 percent in the week ended July 19, down 10 basis points from the week before, the Mortgage Bankers Association said on Wednesday.
It was the biggest weekly drop since August 2012, though rates are still well above the 3.59 percent seen at the beginning of May before they started moving higher.
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Comments from Bernanke last week acted as a balm for rattled markets as he said that the timeline for winding down the central bank's bond-buying program was not set in stone.
The Fed has been buying $85 billion a month in bonds and mortgage-backed assets to keep borrowing costs low and stimulate economic growth.
The low mortgage rates have helped to lure buyers as the housing market gets back on its feet, but concerns the program could end sooner than had been expected sent rates sharply higher over the summer.