Mortgage rates drop slightly

WASHINGTON, Dec. 8 (UPI) -- Long-term mortgage rates dropped slightly in the week ended Wednesday, the U.S. Federal Home Loan Mortgage Corp. said.

Freddie Mac said the average interest rate for 30-year, fixed-rate loans dropped from 4 percent to 3.99 percent with an average of 0.7 points for the week. A year earlier, interest rates for long-term loans averaged 4.61 percent.

For 15-year loans, the average interest rate fell from 3.3 percent to 3.27 percent. On average, 15-year contracts averaged 0.8 points in the week. A year earlier, 15-year, fixed-rate mortgages averaged 3.96 percent.

"Thirty-year fixed-rate loans have declined 0.62 percentage points from a year ago, and median sales prices on existing homes are off 4.7 percent in the year ending with October," said Frank Nothaft, Freddie Mac vice president and chief economist.

"These low rates and home prices have pushed housing affordability to record highs this year. For instance, the National Housing Affordability Index, which dates back to 1971, reached another all-time record high in October for the sixth time in 2011," he said.