Dec. 21 (Bloomberg) — Joseph Brusuelas, senior economist at Bloomberg LP, talks about the outlook for the housing market.
He speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Mortgage rates for 30-year U.S.
loans dropped to the lowest level on record amid signs the
housing market may be set for a turnaround.

The average rate for a 30-year fixed loan fell to 3.91
percent in the week ended today, the lowest in data dating to
1971, from 3.94 percent, Freddie Mac said in a statement. The
average 15-year rate matched last week’s previous all-time low
of 3.21 percent, according to the McLean, Virginia-based
mortgage-finance company.

The U.S. housing market, under pressure from tight lending
standards and foreclosures that depress values, is showing signs
of improvement. Purchases of previously owned homes rose to a
10-month high in November as the inventory of unsold properties
shrank to the lowest level in six years, the National
Association of Realtors reported yesterday.

“Falling home prices meeting already low interest rates
are driving affordability,” said Ellen Zentner, a senior U.S.
economist at Nomura Securities International Inc. in New York.
“Mix that with higher consumer confidence and job growth, and I
can see why home sales appear to be lifting off the bottom.”

The U.S. property market still may fall further and not
rebound until late 2012 or early 2013, when gains probably won’t
match those seen before the housing boom ended in 2006,
according to a survey of 109 economists released this week by
Seattle-based Zillow Inc.

The number of Americans filing claims for unemployment
benefits decreased last week to the lowest level since April
2008, the Labor Department said today. November’s unemployment
rate was 8.6 percent, the lowest since March 2009.

Existing-home sales climbed 4 percent in November from the
previous month to a 4.42 million annual pace, the highest level
since January, according to the Realtors. The number of
previously owned houses on the market dropped to 2.58 million
last month, the fewest since May 2005, the group said.

U.S. home-loan applications declined in the week ended Dec.
16, according to the Mortgage Bankers Association. The
Washington-based group’s index of purchases fell 4.9 percent,
while its measure of refinancing dropped 1.6 percent.

To contact the reporter on this story:
Prashant Gopal in New York at
pgopal2@bloomberg.net

To contact the editor responsible for this story:
Daniel Taub at
dtaub@bloomberg.net

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