Attention homebuyers: Mortgage rates falling again

From staff and wire reports
Rate swingMortgage rates for 30-year fixed U.S. home loans fell to the lowest in five weeks, providing a boost to potential buyers and those who want to refinance.

The average 30-year rate declined to 4.91 percent from 4.98 percent. The 15-year rate was 4.36 percent, mortgage buyer Freddie Mac said today.

Falling mortgage rates, a tax credit for first-time homebuyers and signs the recession may be abating have helped increase demand for U.S. homes. Sales rose 11 percent to a two- year high in the third quarter, the National Association of Realtors said this week.

Federal Reserve bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, which package home loans into securities, brought down yields on the bonds this year, allowing lenders to reduce rates on new loans while still selling the securities backed by them at a profit.

The central bank pledged to buy up to $1.25 trillion in mortgage-backed securities bonds, helping drive mortgage rates to a record low 4.78 percent in April.

The central bank’s purchasing program is scheduled to end in the first quarter of next year, the Federal Open Market Committee said on Sept. 23. It reiterated those plans last week.