U.S. Mortgage Rates Drop Again to 3.99 Percent: Freddie Mac

The 30-year fixed-rate mortgage rate dropped to 3.99 percent in the week ending Dec. 8 from 4 percent in the previous week, according to Freddie Mac.

The mortgage rate has now been at or near four percent, a historic low, for six consecutive weeks. The rate was 4.61 percent during the same period of 2010.

The 15-year fixed-rate mortgage was 3.27 percent, just above its all-time low of 3.26 percent on Oct. 6. Last year, the average rate was 3.96 percent.

Five-year Treasury-indexed adjustable-rate mortgages (ARMs) had an average rate of 2.93 percent, up from 2.90 percent in the previous week, but down from 3.60 percent in the same period of 2010.

These low rates and home prices have pushed housing affordability to record highs this year, said Frank Nothaft, vice president and chief economist of Freddie Mac, in a statement.

Monthly principal and mortgage interest payments accounted for a mere 12.6 percent of median family incomes that month. This level of affordability likely contributed to the rise in conventional mortgage applications for home purchases over the week of Dec. 2 to the most in nearly a year.

But despite the record affordability, the housing market's recovery remains uncertain. Although pending home sales -- a measure of contracts that have been signed but haven't closed -- increased unexpectedly by 10.4 percent in October, high unemployment and economic uncertainty have driven many to rent.