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Record lows set again for mortgages

  • ASSOCIATED PRESS
    This June 13, 2012, photo, shows a house for sale in San Diego. Mortgage buyer Freddie Mac said Thursday, June 14, 2012, that average rates on fixed mortgages rose this week, the first increase in seven weeks, but they remain near historic lows, boosting prospects for home sales this year. (AP Photo/Gregory Bull)
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WASHINGTON >> Average rates on fixed mortgages fell again this week to record lows, creating more incentive for buyers to enter the recovering housing market.

Mortgage buyer Freddie Mac said today that the average rate on the 30-year loan fell to 3.53 percent. That’s down from 3.56 percent last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.83 percent, below last week’s previous record of 2.86 percent.

The rate on the 30-year loan has fallen to or matched record-low levels in 12 of the past 13 weeks.

Cheaper mortgages have contributed to a modest housing recovery. Home sales fell in June but were up from the same month last year. Home prices are rising in most markets.

Builders are putting up more houses than they have in nearly four years, a long-awaited recovery that could help energize the U.S. economy.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

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