Mortgage rates (NMCMFUS) for 30-year U.S. loans
declined, matching the lowest level on record amid signs that
demand for housing may be recovering.

The average rate for a 30-year mortgage fell to 3.91
percent in the week ended today from 3.95 percent, Freddie Mac (FMCC)
said in a statement. That rate, first reached last month, is the
lowest in records dating to 1971. The average 15-year (NMCM15US) rate
dropped to 3.23 percent from 3.24 percent, according to the
McLean, Virginia-based mortgage-finance company.

Low mortgage rates are helping cut the cost of buying,
supporting demand for housing. New-home sales (NHSLTOT) jumped to a seven-
month high in November, Commerce Department figures showed Dec.
23. Sales of existing homes (ETSLTOTL) rose in November to a 10-month high,
the National Association of Realtors said Dec. 21.

“The affordability is at record levels,” George Mokrzan,
director of economics at Huntington National Bank in Columbus,
Ohio, said before the mortgage rates were issued. “You’re
starting to see some firming in the sales data.”

Home-loan applications fell last week, which included the
Christmas holiday. The Mortgage Bankers Association’s index
decreased 4.1 percent in the period ended Dec. 30 from the prior
week, the Washington-based group reported yesterday. The
purchase (MBAVPRCH) index tumbled 9.6 percent to the lowest level since
October. The refinancing (MBAVREFI) gauge fell 2.5 percent.

To contact the reporter on this story:
Brian Louis in Chicago at
blouis1@bloomberg.net

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