Mortgage Rates Fall This Week

After two successive weeks of increase, average U.S. rates on fixed mortgages declined this week, keeping home-buying affordable.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.22% from 4.35% last week. The average on the 15-year fixed mortgage dipped to 3.27% from 3.35%.

Rates had spiked over the summer and reached a two-year high in July on speculation that the Federal Reserve would slow its bond purchases later this year.

The Fed held off in September and October but in the minutes for the October meeting, policymakers said they still expected to dial down their easy-money policy within a few months. The bond purchases are intended to keep long-term interest rates low.

Mortgage rates tend to follow the yield on the 10-year Treasury note. They have stabilized since September and remain low by historical standards.

Hybrid adjustable rate mortgages were mixed. The five-year ARM average fell to 2.95% with an average 0.5 point. It was 3.01% a week ago and 2.74% a year ago. The five-year ARM has been below 3% three of the past four weeks. The one-year ARM average held steady at 2.61% with an average 0.4 point.