Freddie Mac: Mortgage Rates Drift Below 5 Percent

U.S. average 30-year mortgage rates slipped back below 5 percent in the past week, enhancing affordability, home funding company Freddie Mac  said on Thursday.

The long-term borrowing cost dipped to 4.97 percent in the week ended March 4 from 5.05 percent the prior week, swinging back and forth around 5 percent for weeks.

"The federal tax credit for homebuyers, which expires on April 30, may make housing even more affordable for some families already in the middle of the home buying process," Frank Nothaft, Freddie Mac chief economist, said in a statement.

The fourth quarter of 2009 was the third most affordable quarter since 1981, he said, behind the first and second quarters of last year.

At the all-time low dating back to 1971, when Freddie Mac started tracking rates weekly, the 30-year loan averaged 4.71 percent in early December 2009.

Monthly principal and interest mortgage payments of $709 in January on a home purchased at a median price of $163,800 were the lowest cost since February 1998, Freddie Mac said, citing National Association of Realtors figures.

In addition to near record-low mortgage rates boosting affordability, home prices have fallen roughly 30 percent from their mid-2006 highs.

Buyers who qualify for the $8,000 first-time buyer tax credit of $6,500 move-up credit need to sign contracts by the end of April and close loans by June 30.

Lenders charged an average of 0.7 point in fees on 30-year mortgages last week, the same as a week earlier.