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Friday, Sep. 04, 2009

Mortgage rates edge down to 5.08%

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Rates for 30-year home loans edged down this week, remaining close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.08 percent, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while higher than the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

"Low mortgage rates are helping to keep housing very affordable," Frank Nothaft, Freddie Mac's chief economist, said in a statement.

To revive the economy, the Federal Reserve is spending $1.25 trillion on mortgage-backed securities, which has driven down rates on home loans. That money is set to run out by winter, though some analysts expect the central bank to scale back its purchases gradually, allowing the program to last longer.

The average rate on a 15-year fixed-rate mortgage fell to 4.54 percent, from 4.58 percent last week.