U.S. mortgage rates dropped to a record low, the first decline in a month, as the Federal Reserve began a program to buy Treasury bonds to support the economy.
The rate for a 30-year fixed loan fell, to 4.17% in the week ended Thursday, from 4.24%, Freddie Mac said in a statement. That was the lowest level in the McLean, Va., mortgage-finance company's records dating to 1971. The average 15-year rate declined, to 3.57%, from 3.63%.
The Fed announced last week that it would buy $600 billion of Treasuries to keep interest rates low and boost economic growth, a method known as quantitative easing. Yields on government bonds serve as a benchmark for other debt, signaling home loan rates may fall further after seven months of declines.
The previous record low for the 30-year rate was 4.19%, reached in the week ended Oct. 14. The rate tumbled from a high of 5.21% in April as concern that an economic recovery may falter increased demand for the safety of Treasuries and government-supported bonds tied to home loans.