Mortgage Informer

U.S. mortgage rates were little changed as the Federal Reserve restated its plan to keep interest rates low for an “extended period.”

Rates for 30-year fixed loans slipped to 5.06 percent in the week ended today from 5.07 percent last week, Freddie Mac said in a statement. The average 15-year rate was 4.39 percent, the McLean, Virginia-based mortgage finance company said.

The Federal Open Market Committee said yesterday that U.S. economic conditions are likely to warrant “exceptionally low” interest rates for an extended period. Low interest rates have bolstered demand for housing by making mortgage payments more affordable. Home sales may slump after a tax credit for some buyers expires tomorrow, said Brad Hunter, chief economist at real estate research firm Metrostudy.

“Mortgage rates are still very much supportive of housing demand,” said Hunter, based in Palm Beach Gardens, Florida. “We need jobs. That is really the key driver going forward for housing.”

The Fed said yesterday that the labor market is beginning to improve. The unemployment rate has been stuck at 9.7 percent for three straight months even as payrolls started to grow.

Home sales jumped in March as consumers took advantage of the tax breaks. Sales of previously owned homes rose 6.8 percent in March to a 5.35 million annual pace, the National Association of Realtors reported last week, while new home sales surged 27 percent, the biggest gain since 1963, to a 411,000 annual pace.

The Mortgage Bankers Association’s index of mortgage applications fell 2.9 percent in the week ended April 23. The portion of refinancings slumped 8.8 percent. Applications to purchase a home gained 7.4 percent.

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Tags: Mortgage, Mortgage Rates