Fixed mortgages were mostly flat this week after hitting their lowest levels in decades. But few Americans are capitalizing on them.
The average rate on the 30-year fixed mortgage stayed at 4.22 percent for the second straight week, Freddie Mac said Thursday. The rate hit 4.15 percent two weeks ago, the lowest level on records dating to 1971.
The average rate on the 15-year fixed mortgage, a popular refinancing option, fell to 3.39 percent from 3.44 percent. Two weeks ago, it reached 3.36—the lowest rate on records dating to 1991 and likely the lowest ever, according to economists.
Mortgage rates typically track the yield on the 10-year Treasury note. Yields rose this week as investors shifted money back to a more stable stock market.
Low rates have done little to revive a weak housing market.
Mortgage applications to purchase a home fell to 15-year lows last month, the Mortgage Bankers Association said. High unemployment, falling home prices and weaker economy have left many people hesitant to buy a home.
Others can't qualify for the low rates. Their credit is too weak to meet banks' tighter lending standards. Many banks are requiring larger down payments. Some potential homebuyers are stuck in homes that are worth less than the existing mortgage.
Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. Yet sales remain unhealthy.
Sales of new homes are on pace to finish the year as the lowest on records dating back to 1963. The pace of re-sales is shaping up to be the worst in 14 years.
Home prices haven't fared much better. Since the peak of the housing boom in 2007, homes have lost nearly a third of their value. And they are expected to fall another 5 to 10 percent by year's end, analysts say.
The weak housing market has been a drag on the economy. Without more jobs, the housing market is unlikely to recover any time soon.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on a five-year adjustable-rate mortgage fell to 2.96 percent. That's the lowest rate on records dating to January 2005. It was the fifth straight week of record lows for this type of loan.
The average rate for the one-year adjustable-rate mortgage fell to 2.89 percent. Its average of 2.86 percent two weeks ago was the lowest on records going back to 1984.
The rates do not include extra fees known as points. One point is equal to 1 percent of the total loan amount.
The average fees for the 30-year held steady at 0.7 point. The 15-year fixed loans and 5-year and one-year adjustable rate loans were all at 0.6 point.