Mortgage rates again drop to historic lows

Freddie Mac's Primary Mortgage Market Survey for the week ending February 2 found mortgage rates dropped to new historic lows as economic reports showed the economy grew less than expected in the fourth quarter of 2011.

The 30-year fixed-rate mortgage averaged 3.87 percent for the week, down from 3.98 percent the week before. The 15-year fixed-rate mortgage averaged 3.14 percent this week, down from 3.24 percent the week prior.

Frank Nothaft, vice president and chief economist for Freddie Mac, said economic reports for the fourth quarter of 2011 showed weak growth falling short of market projections. However, residential investment increased, and residential construction grew 0.7 percent in December.

The historically low mortgage rates have helped many homeowners avoid foreclosure. Freddie Mac's fourth quarter refinance analysis showed 85 percent of homeowners who were able to refinance their home loans were able to maintain or reduce their mortgage debt in the fourth quarter of 2011. Of these borrowers, 37 percent maintained their current mortgage debt, and 49 percent reduced their principle balance.

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