NEW YORK, June 29 (Reuters) - Interest rates on 30-year fixed mortgages dropped in the latest week to a record low, real estate website Zillow.com reported on Tuesday, as global financial jitters sent investors into safe-haven U.S. debt.
Lower interest rates on mortgages may buoy refinancing, putting more cash into consumers’ hands to funnel into the economy. They also make homes more affordable as the housing market copes with the absence of government support.
Mortgage rates for 30-year fixed mortgages, the most widely used loan, were 4.49 percent Tuesday afternoon, down from 4.53 percent the same time last week, Zillow Mortgage Marketplace said on Tuesday.
The rate represents the lowest recorded since the Zillow Mortgage Marketplace launched in April 2008. The 30-year fixed mortgage rate fell sharply last Thursday to 4.45 percent then hovered near 4.50 percent for the remainder of the week, Zillow said.
Fifteen-year fixed mortgage rates were 3.97 percent, down from 4.04 percent the week prior. Rates for 5/1 adjustable-rate mortgages, or ARMs, set at a fixed rate for five years and adjustable each following year, were 3.44 percent, down from 3.50 percent the week prior.
While low rates and high affordability helped the housing market gain ground over the past year, the sector has struggled since the April 30 expiration of popular home buyer tax credits.
To take advantage of the $8,000 first-time buyer credit or a $6,500 credit for existing owners buying a new residence, people had to sign purchase contracts by April 30 and close by June 30. There is currently a push in Congress to extend the contract settlement by three months.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities. Yields move inversely to price.
Treasuries have seen strong demand in recent weeks as the fiscal crisis in troubled euro zone countries sent global investors into the safe-haven embrace of U.S debt.
(Editing by Andrew Hay)
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