By Brian Louis Nov. 12 (Bloomberg) — Mortgage rates for 30-year fixed U.S. home loans fell to the lowest in five weeks, providing a boost to potential buyers and those who want to refinance. The average 30-year rate declined to 4.91 percent from 4.98 percent. The 15-year rate was 4.36 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. Falling mortgage rates, a tax credit for first-time homebuyers and signs the recession may be abating have helped increase demand for U.S. homes. Sales rose 11 percent to a two- year high in the third quarter, the National Association of Realtors said this week. “You’re probably not going to see upward pressure on mortgage rates anytime soon,” said Scott Brown , chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “You’re not going to see a full recovery in the housing sector until you see a recovery beginning in the labor market.” The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983. Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed Nov. 7. The jobless rate rose from 9.8 percent in September. Unemployment is extending a housing recession that started with mortgage defaults on loans to subprime borrowers and has spread to prime borrowers as the economy weakened. Central Bank Plan Federal Reserve bond purchases from Fannie Mae , Freddie Mac and Ginnie Mae, which package home loans into securities, brought down yields on the bonds this year, allowing lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The central bank pledged to buy up to $1.25 trillion in mortgage-backed securities bonds, helping drive mortgage rates to a record low 4.78 percent in April. The central bank’s purchasing program is scheduled to end in the first quarter of next year, the Federal Open Market Committee said on Sept. 23. It reiterated those plans last week. To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net .
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U.S. Mortgage Rates for 30-Year Fixed Home Loans Decline for Second Week
