Mortgage Rates Fall With 30-Year at 16-Month Low of 3.92%

Mortgage rates declined, remaining at a 16-month low as more affordable borrowing costs fuel an increase in refinancing.

The average rate for a 30-year fixed mortgage was 3.92%, down from 3.97% last week, Freddie Mac said in a statement today. The average 15-year rate dropped to 3.08% from 3.18%, the McLean, Va.-based mortgage-finance company said.

Homeowners are rushing to cut their monthly payments as rates hover at the lowest levels since June 2013. Refinancing applications jumped 23% in the week ended Oct. 17 to an 11-month high, the Mortgage Bankers Association said yesterday. The refinance share rose to 65% of home-loan applications from 59%.

"The dip in rates here are for people who were looking at the numbers throughout the summer and saying, 'It's pretty close,'" Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage-data company, said in a telephone interview. "And now you have a place where that refinance might make sense."

While lower rates won’t give an immediate boost to housing demand because of the time it takes to select and complete the purchase of a property, sales have been improving. Purchases of previously owned U.S. homes increased 2.4% in September to a 5.17 million annual rate, the highest level in a year, the National Association of Realtors said this week.

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