Mortgage rates head to record lows

WASHINGTON, Jan. 12 (UPI) -- Average fixed mortgage interest rates set record lows in the week ending Thursday, the Federal Home Loan Mortgage Corp. said.

The record-breaking is beginning to look like a habit, Freddie Mac said, calling it a "trend."

Average mortgage rates set "new all-time record lows for all products covered in the (weekly) survey," the report said.

Interest for 30-year fixed contracts dropped to 3.89 percent with 0.7 points, Freddie Mac said.

The 15-year fixed rate dropped from 3.23 percent to 3.16 percent with 0.8 points.

Five-year adjustable rate mortgages averaged 2.82 percent for the week, a new low, with an average 0.7 point.

One-year Treasury-indexed adjustable rate mortgages fell to an average interest rate of 2.76 percent, down from 2.8 percent in the previous week.

"Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market. Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated," said Frank Nothaft, Freddie Mac vice president and chief economist.

"The 2009 to 2011 period had the highest three-year average unemployment rate since 1939 to 1941," he said. "Moreover, the Federal Reserve indicated in its Jan. 11 regional economic review that most industries saw limited permanent hiring at the end of last year," he said in a statement.