Fixed mortgage rates for 30-year U.S. home loans fell for the first time in three weeks as a Federal Reserve Board program of buying home loan securities reduced rates.
The average rate for a 30-year loan fell to 4.82% from 4.86% a week earlier, Freddie Mac said Thursday. The 15-year rate averaged 4.50%, down from 4.52%.
A Fed program to buy as much as $1.25 trillion of mortgage-backed securities helped push rates to a record-low 4.78% twice in April.
The central bank is seeking lower rates to spark property buying even with house prices falling. It also plans to buy up to $300 billion of Treasury securities to keep interest rates low.
"They want to keep those long-term rates low, the mortgage rate in particular, to help facilitate a recovery in housing," said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla.
The central bank's mortgage bond purchases from Fannie Mae and Freddie Mac have freed cash for the federally controlled companies to buy more loans from lenders, improving liquidity for homebuyers.