Mortgage rates dip to historic lows

By Vicki Needham - 11/15/12 02:45 PM ET

Mortgage rate dipped to historic lows this week amid higher consumer confidence and lower wholesale prices, as the housing market makes a gradual recovery.

Rates on 30-year-fixed loans averaged 3.34 percent, down from 3.40 last week and below the previous low of 3.36 percent set Oct. 4, Freddie Mac reported on Thursday.

On 15-year mortgages, the rate fell to 2.65 percent, down from 2.69 percent last week — falling below the previous low of 2.66 percent, hit Oct. 18.

"Fixed mortgage rates eased this week to record lows on indicators of higher consumer confidence and lower wholesale prices," said Frank Nothaft, vice president and chief economist of Freddie Mac.

Consumer confidence hit a five-year high in November, while prices fell in October.

Rates on 30-year loans have been below 4 percent all year and have reached a few all-time lows since the Federal Reserve announced its latest round of bond buying in September.

Home builders say lower interest rates are helping make homes more affordable to median-income families even as house prices inch up in metro areas across the country in the third quarter, according to an index released Thursday by the National Association of Home Builders (NAHB).

Nationwide, 74.1 percent of all homes sold in the July-September quarter were bought by workers earning the U.S. median income of $65,000.

This was up slightly from the 73.8 percent in the second quarter.

The median price of all new and existing homes sold in the third quarter was $189,000, up from $176,000 in third quarter last year and the best showing since the final three months of 2008, according to NAHB.

"Clearly, for families who qualify for a mortgage at such favorable terms, the outlook is brightening, but being able to afford a home and getting approved for a mortgage are still two different things in the current marketplace," NAHB chief economist David Crowe.