Mortgage Rates At Lowest Level Since Late May

RENEE MONTAGNE, host:

NPR's business news starts with falling mortgage rates.

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MONTAGNE: Those mortgage rates are again near historic lows. That's good news for homebuyers or people looking to refinance their loan.

NPR's Chris Arnold reports.

CHRIS ARNOLD: For anyone who's been kicking themselves for not refinancing when rates were super low earlier this year, now might be the chance. The Mortgage Bankers Association says the average rate last week for 30-year, fixed-rate loans was 4.97 percent, and mortgage applications have jumped up 50 percent from where they were early this summer.

Stew Larsen heads up mortgage banking for Bank of the West.

Mr. STEW LARSEN (Bank of the West): This is so rare. I mean, I've been in the business since 1975 in mortgage lending, and in the past 12 months, I've seen rates at the lowest I've ever seen them, and that's 30-plus years.

ARNOLD: The Federal Reserve has been intervening to keep rates low, but next year, it's expected to gradually start backing out of some of its efforts, which leads many experts to think that rates won't stay this low for that much longer.

Mr. LARSEN: I doubt that we'll be going lowering than this. Certainly, the Fed intervention has truly helped, and they've supported this.

ARNOLD: Larsen says it's not just refies. He's seeing a lot more home purchases compared to earlier this year. He says that that's been due to the low rates, more affordable home prices and that $8,000 tax credit for first-time homebuyers. Larsen would like to see that extended past its November 30th deadline.

Chris Arnold, NPR News. Transcript provided by NPR, Copyright National Public Radio.