(Adds quotes, background, details from survey)
By Julie Haviv
NEW YORK, Sept 30 U.S. 30-year and 15-year
mortgage rates either tied or reached record lows in the latest
week, according to a survey released on Thursday by Freddie
Mac, the second-largest U.S. mortgage finance company.
While rock-bottom rates offer a glimmer of hope for a
housing market struggling to find footing in the aftermath of
the expiration of popular home buyer tax credits, their impact
on home loan demand has been tepid. A weak jobs market and
flailing economy continue to weigh on consumer confidence.
Interest rates on U.S. 30-year fixed-rate mortgages, the
most widely used loan, averaged 4.32 percent for the week ended
Sept. 30, down from the previous week's 4.37 percent and
matching a record low set earlier in the month, according to
Rates were also below their year-ago level of 4.94 percent.
Freddie Mac started the survey in April 1971.
Fifteen-year fixed-rate mortgages averaged 3.75 percent,
down from 3.82 percent last week, the lowest since Freddie Mac
began surveying this loan type in 1991.
"Confidence in the state of the economy fell among
consumers and businesses, which led to a decline in long-term
bond yields and brought many mortgage rates to record lows this
week," Frank Nothaft, Freddie Mac vice president and chief
economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and
yields on mortgage-backed securities.
Ellen Bitton, president and CEO of Park Avenue Mortgage
Group in New York, said people are pessimistic.
"They think much more cautiously," she said. "People like
to buy when there is optimism in the market and at home.
"We are still in the throes of flushing out the system,"
The housing market has been struggling since the expiration
of popular home buyer tax credits.
Diane Saatchi, senior vice president at Saunders &
Associates in Bridgehampton, New York, said buyer hesitation is
"Buyers are looking, but seem to be waiting for more and
better as though time is on their side," she said.
"Unemployment is holding people back. Even those who are
securely employed see the rate as indication of trouble ahead
if not for them, for the economy in general," she said.
Freddie Mac said rates on 5/1 ARMs, set at a fixed rate for
five years and adjustable in each following year, was 3.52
percent, down from 3.54 percent last week, reaching the lowest
level since Freddie Mac began tracking this loan type in 2005.
One-year adjustable-rate mortgages were 3.48 percent, up
from 3.46 percent last week. For details double-click on
(Editing by Padraic Cassidy)