US Fixed Rate Mortgage Below 4%

The interest rate on a 30-year fixed mortgage fell to 3.99% last week, but home buyers are still scarce. The current rate is very near its record low of 3.94%, set just nine weeks ago. The interest rate on a 15-year fixed mortgage also fell, to 3.27%, just one basis point above its all-time low of nine weeks ago.

Buyers were not enticed by the low rates, however, as concerns about jobs, stagnant wages, and falling home values continue to hold down sales. Loan requirements are also stiffer, making it harder for buyers to qualify for a home loan. The Mortgage Bankers Association reported a 13% increase in mortgage applications last week, but the starting point was very low and the new applications haven’t boosted overall lending by much.

Refinancings increased slightly, but most homeowners who can qualify for refinancing have already done so as mortgage rates have remained below 5% for essentially all of 2011. The Obama administration’s new home loan refinancing program has added only a small number of borrowers so far.