August 12, 2010 / 2:01 PM / 9 years ago

Mortgage rates hit fresh lows on soft U.S. economy

NEW YORK, Aug 12 (Reuters) - Home loan rates set new lows in the latest week on more evidence of a soft U.S. economy and high unemployment, home funding company Freddie Mac said on Thursday.

The average 30-year mortgage rate fell to 4.44 percent in the week ended Aug. 12, the lowest since Freddie Mac records began in 1971. The prior record low was 4.49 percent a week ago, which was well below 5.29 percent a year ago.

Fifteen-year mortgage rates dropped 0.03 percentage point to average 3.92 percent, the lowest since records began in 1991. And five-year Treasury-indexed adjustable-rate mortgages (ARMs) at 3.56 percent also set a record low, dating back to 2005.

“Interest rates for fixed mortgages and five-year hybrid ARMs again broke record lows this week following reports of a sluggish job market,” Frank Nothaft, chief economist at Freddie Mac said in a statement.

The Federal Reserve this week downgraded its outlook for economic growth and initiated steps to keep interest rates low to help stimulate the economy. Read more at [ID:nN09275781].

Reporting by Lynn Adler, Editing by Chizu Nomiyama

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