US mortgage rates fall to lowest level in decades

January 1st, 2009 - 4:13 am ICT by IANS  

Washington, Jan 1 (DPA) Mortgage rates for 30-year-fixed home loans in the US fell for the ninth straight week and to their lowest level in 37 years, according to a report released Wednesday by financier Freddie Mac.The rate dropped in the final week of December to 5.10, down from the 5.14 rate the previous week, Freddie Mac said. For the same period in 2007, the rate was at 6.07 percent.

The mortgage rate has not been this low since Freddie Mac began the survey in 1971.

The crisis in the financial markets caused by risky home loans that brought about record defaults has sent the housing market plummeting and played a key role in sparking the economic slowdown.

“Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all time record low since Freddie Mac’s survey began in April 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist.

The US Treasury Department has moved to pump hundreds of billions of dollars into the finance market to buy out bad loans and rescue the industry. The Federal Reserve has announced a plan to buy up $500 billion in mortgage securities attached to government-backed financiers Fannie Mae, Freddie Mac, and Ginnie Mae.

The three firms have been faulted for risky practices along with other private companies who are blamed for bringing on the economic crisis.

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