Industries Banking/Finance

Mortgage rates reach record lows on weak economic news

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Mortgage rates fell to new lows this week as reports showed fourth-quarter economic growth was lower than predicted.

The average 30-year, fixed-rate mortgage was 3.87 percent, down from 3.98 percent last week, according to Freddie Mac’s weekly survey. A year ago, the average 30-year rate was 4.81 percent.

The 15-year, fixed-rate mortgage averaged 3.14 percent this week, down from an average of 3.24 percent last week. A year ago, the average 15-year fixed rate was 4.08 percent.

“Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections,” Freddie Mac’s Chief Economist and Vice President Frank Nothaft, said in a statement. “The Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat. One bright spot, however, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent.”


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