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Mortgage Rates Hit Fresh Lows: 30-Year at 3.79%

The Exchange

Here we go again. The average fixed rate 30-year mortgage fell to 3.79% this week, yet another record low, according to data from Freddie Mac. That's down from 3.83% the week prior, and marks the third straight week of fresh lows.

The 15-year rate edged just slightly lower to 3.04%, from 3.05%, also a new record low.

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The low rates come amid signs of improvement in housing -- declining foreclosures and delinquencies, and increases to housing starts and the NAHB housing index -- and would be a nice touch for those looking to refinance, although many have struggled to take advantage.

An array of weekly and monthly data have been closely watched as economists look for affirmation of a trend -- be it improvement or continued distress -- and as homeowners and prospective buyers wrestle with regional realities, which vary greatly. When it comes to rates, some of the factors hitting home are originating further away.  The economic turmoil in Europe, in particular, is having an effect, according to Freddie Mac vice president Frank Nothaft.

"The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week," said Nothaft, noting that industrial production saw its largest jump since December 2010 and consumer sentiment hit its highest level since January 2008.

The low rates are encouraging demand. Mortgage applications increased 9.2 percent last week from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The refinance portion of that index jumped 13%, with refinancing demand now accounting for 74% of the mortgage application volume, according to the data.

Again, though, much to the frustration of many homeowners, not everyone has been able to take advantage of the low rates, in part because of backlog at large banks.

Thursday's data follow a report that foreclosure filings in the U.S. dropped to a five-year low last month as lenders upped efforts to avoid seizing properties. Bank of America (BAC), for one, said last week that it was rolling out new efforts to help keep homeowners out of foreclosure thanks to the robo-signing settlement. It began mailing 200,000 letters offering certain customers mortgage principal reductions, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages.

One improvement in the housing landscape: The delinquency rate for one-to-four-unit residential properties decreased by 18 basis points in the first quarter from the fourth quarter of 2011. At the end of the first quarter, there was a delinquency rate of 7.4% of all loans outstanding.

"Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve," said Michael Fratantoni, MBA's Vice President of Research and Economics.  "Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future."

Data on housing starts in April and the NAHB housing index in May, released earlier in the week, both increased more than expected.

How low will mortgage rates go? And have you been able to take advantage? Caught up in the bank backlog? Tell us what you think in the comment section below.