Mortgage rates remain below 5 percent

Mortgage rates held below the 5 percent threshold for the second straight week, a report said Thursday, weeks before a government program that has been keeping rates low is scheduled to expire. The average rate on a 30-year fixed rate mortgage was 4.95 percent this week, down from 4.97 percent a week earlier, mortgage finance company Freddie Mac said.

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Rates dropped to a record low of 4.71 percent in December and have hovered around 5 percent since, kept down by a Federal Reserve campaign to stabilize the housing market by lowering mortgage rates.

The central bank’s $1.25 trillion program to buy up mortgage securities issued by Freddie Mac and sibling companiy Fannie Mae is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens.

Some analysts argue that rates could rise once the Fed’s program ends, hurting both the recovery in housing and the overall economy. But government officials are optimistic that the Fed will be able to end its program without a major disruption.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.32 percent, down from 4.33 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.05 percent, down from 4.11 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.22 percent from 4.27 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac‘s survey averaged 0.7 of a point for 30-year and 15-year loans and 0.6 of a point for five-year and one-year loans.

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