30-Year Fixed Mortgage Drops to Historic Low 3.51 percent

This week the average U.S. rates on fixed mortgages hit a new record low--at 3.51 percent for 30-year fixed mortgage, reported The Associated Press.

According to the housing finance company Freddie Mac, the average rate on 30-year fixed mortgages dropped last week from 3.56 percent to 3.51, while the rate on 15-year fixed mortgages declined from 2.77 percent to 2.76 percent. That's not too far from the lowest ever reached the 30-year fixed was way back in November of 1971 at 3.31 percent while the lowest on record for 15-year fixed mortgage was at 2.63 percent.

In more than two years, the number of Americans buying homes increased between January and December, according to The National Association of Realtors.

Freddie Mac surveyors made their calculations across the country each week between Monday and Wednesday, the AP reported.

Homebuyers are purchasing at one of the lowest mortgage rates in years and it's only aiding the housing sector. More people are also refinancing their mortgage for affordably low, monthly payments. It's a sign that's encouraging more people to spend more money and help the recovering economy.

With more homes being built, the AP reported new home sales have also rose 16 percent to the highest in more than four years, while prices of homes increased in December. 

However, many interested home buyers are finding it difficult to qualify for mortgage lending rules for home loans. Stringent rules were put in effect to prevent another crisis with irresponsible borrowing.

The average fees for both 30-year mortgages and 15-year loans stayed steady at 0.8 point.

The average mortgage rate calculation doesn't take into account additional fees, or points.  According to the AP, one point is one percent of total loan amount and many borrowers have to pay the points in order to qualify for the lowest rates.