Mortgage rates dip below 5%

Rates on 30-year fixed mortgages fell slightly this week, dipping to less than 5 percent, mortgage financier Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage was 4.97 percent this week, down from an average of 5.01 percent last week.

Last year at this time, the rate for a 30-year fixed mortgage averaged 5.16 percent, Freddie Mac said. Rates fell to a record low of 4.71 percent in early December.

They have held around 5 percent thanks to a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.

Low rates also can spur refinancing activity. More than two out of three mortgage applications were for refinance transactions over the first six weeks of this year, according to the Mortgage Bankers Association.

Freddie Mac collects mortgage rates Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

The average rate on 15-year fixed-rate mortgages fell to 4.34 percent from 4.40 percent last week, according to Freddie Mac.