Mortgage Rates Reach Historic Lows

Mortgage rates dropped to another record low this week. According to Freddie Mac's weekly survey, the interest rate on a 30-year fixed-rate mortgage fell below 5 percent for the first time. That is the lowest level since the survey began in 1971.

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RENEE MONTAGNE, host:

NPR's business news starts with mortgage rates at an all-time low.

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MONTAGNE: It's one of the few positive signs in this economy. The latest survey from mortgage giant Freddie Mac shows that mortgage rates have dropped for 11 straight weeks to a record low. NPR's Chris Arnold reports.

CHRIS ARNOLD: Hone mortgage rates haven't been this low since Freddie Mac started tracking the data back in 1971. The weekly average rate for 30-year fixed-rates loans is 4.96 percent, and that factors in that some people are paying so-called points to buy down the rate, but many people get around five and a quarter without paying points. That's saving a lot of people hundreds of dollars a month on their house payments if they refinance right now. And rates might get even better.

Dr. ALBERT "PETE" KYLE (Finance, University of Maryland): I think there's a good chance that long-term fixed-rate mortgage rates could continue to fall and get into the mid fours or even low fours.

ARNOLD: Pete Kyle is a finance professor at the University of Maryland. He says the government is taking steps that should drive rates lower, and he says the extra spending money and the boost to the housing market will be a big help to the economy.

Dr. KYLE: It's a great thing to the economy, and I think it's the most powerful financial stimulus we have right now going on.

ARNOLD: So, Kyle says, it might be time to take advantage of the situation and get your mortgage broker on the phone. Chris Arnold, NPR News.

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