In the wake of slowing home sales after the two federal tax credits have expired, home buyers now have a new incentive to purchase homes which is record low interest rates. This week 30 year mortgage rates dropped to their lowest level since 1971, giving consumers more incentive to lock in low payments on home purchases and refinancing.
Freddie Mac reported Thursday that the average rate for 30-year fixed loans dropped to 4.69 percent down from 4.75 percent the previous week.
Freddie Mac began tracking mortgage interest rates back in 1971. The previous record of 4.71 percent was set last December. Furthermore, interest rates for 15-year and five-year mortgages have also hit new record lows.
With investors concerned about the European debt crisis and the continued turbulent stock market, mortgage rates have fallen over the past two months as investors shifted money into the safety of Treasury bonds which is driving down yields. Mortgage rates usually follow the yields on long-term Treasury debt.
Down from 4.2 percent a week earlier, rates on 15-year, fixed-rate mortgages fell to an average of 4.13 percent, the lowest on record since September 1991.