Lender Freddie Mac’s weekly rate survey showed the benchmark 30-year fixed rate American mortgage had dropped to a national average of 5.17 per cent, the lowest since the poll began in 1971.
Just 12 months ago the average US 30 year fixed rate deal had an average rate of 6.14 percent.
Fixed rate mortgages on 15-year agreements are also low this week averaging 4.92 per cent, down from last week when it averaged 5.20 per cent.
Freddie Mac chief economist Frank Nothaft said:
“The decline was supported by the Federal Reserve announcement on December 16, 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.”
Last week the Mortgage Bankers’ Association (MBA) said home loan applications in America were on the up, showing an increase of 2.9 per cent in a week.
This was up 37.3 per cent compared with the same week one year earlier, the group added.
The MBA also agreed with Freddie Mac, saying interest averages on 15 and 30 year mortgages were falling.