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Bloomberg(Bloomberg) -- U.S. mortgage rates declined, sending long-term borrowing costs to the second-lowest level on record after an unexpected increase in home sales.
The average rate for a 30-year fixed loan dropped to 3.98 percent in the week ended today from 4 percent, Freddie Mac said in a statement. It reached 3.94 percent last month, the lowest in Freddie Mac records dating to 1971. The average 15-year rate fell to 3.30 percent this week from 3.31 percent, according to the McLean, Virginia-based mortgage-finance company.
Falling borrowing costs may be bolstering home demand. Purchases of previously owned houses rose last month to a 4.97 million annual rate from September’s 4.9 million pace, the National Association of Realtors said Nov. 21. The median estimate of 75 economists in a Bloomberg survey was for a decline to 4.8 million.
“Low interest rates have some effect,” Paul Dales, senior U.S. economist at Capital Economics Ltd. in Toronto, said in a telephone interview. “Housing is incredibly affordable at the moment due to the low interest rates and good valuations to be had as well.”
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http://www.businessweek.com/news/2011-11-23/mortgage-rates-in-the-u-s-decline-with-30-year-loan-at-3-98-.html