Freddie Mac: Mortgage rates tie record lows

Lenders were offering 30-year fixed-rate mortgages to well-qualified borrowers at an average 3.91% this week, tying the all-time record low, Freddie Mac said.

It was the fifth consecutive week the 30-year fixed mortgage has averaged below 4% in the survey, and down from an average 3.95% a week earlier. The borrowers would have paid 0.8% of the loan amount in upfront lender fees and discount points to obtain the loans, Freddie said in its weekly report.

The report, issued Thursday, noted some recent signs of improvement in the housing markets, which would be a welcome change. Despite the success of the Federal Reserve in lowering rates to stimulate the economy, demand for loans to purchase homes -- as opposed to refinancing existing mortgages -- has been weak.

In letters to key lawmakers Wednesday, the Fed said Freddie Mac and its sister company, Fannie Mae, should play a greater role in turning around the battered housing markets, including providing cheaper mortgages to a broader pool of homeowners.

The recommendation is likely to generate controversy. Fannie and Freddie, government-sponsored companies that buy and guarantee home loans made by banks and other home lenders, were so near collapse three years ago that they had to be taken over by the government and have cost taxpayers more than $150 billion.

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