U.S. 30-year mortgage rate hits record low 5.19 percent

NEW YORK (Reuters) - The average 30-year U.S. mortgage rate fell just over 1/4 point to 5.19 percent, the lowest since Freddie Mac started its weekly survey 37 years ago.

The 30-year rate fell from 5.47 percent the prior week, and from 6.14 percent a year ago, while the 15-year loan rate fell by a similar amount to 4.92 percent from 5.20 percent in the week ended December 18.

Rates on home loans have fallen after the government last month said it planned to buy up to $500 billion of mortgage-backed bonds. The Federal Reserve this week said it was ready to expand that program if needed to loosen the lending that froze amid huge write-downs on soured mortgages and record foreclosures.

This was the seventh straight weekly drop in 30-year fixed mortgage rates, according to Freddie Mac.

“The decline was supported by the Federal Reserve announcement on December 16th, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant,” Frank Nothaft, Freddie Mac chief economist, said in a statement.

Reporting by Lynn Adler, Editing by Chizu Nomiyama