U.S. Mortage Rates Drop to Record Low of 3.87 Percent

U.S. 30-year fixed-rate mortgage rates dropped to another record low of 3.87 percent in the week ending Feb. 2, down from 3.98 percent in the previous week, according to Freddie Mac.

Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections, said Frank Nothaft, vice president and chief economist of Freddie Mac, in a statement.

He noted that GDP growth in the fourth quarter missed expecations and consumer spending was flat in December. However, residential construction rose 0.7 percent in December and residential investment rose in the last quarter.

The average mortgage rate has been below four percent for nine weeks, near historic lows. But more restrictions have made securing mortgages difficult for borrowers. On Tuesday, President Obama detailed a plan to expand refinancing for homeowners with underwater mortgages and loans not backed by Freddie and Fannie Mae.

The average rate for 15-year fixed-rate mortgages was 3.14 percent, down from 3.24 percent in the previous week and 4.08 percent in the previous year.

Five-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 2.80 percent, down compared to 2.85 percent in the previous week and 3.69 percent in the previous year. One-year Treasury-indexed ARMs rose to 2.76 percent from 2.74 percent in the previous week and up from 3.26 percent in the previous year.