4.69%; Mortgage rates hit an all-time low, drawing a collective yawn from consumers running short on confidence
The average rate on a 30-year fixed-rate mortgage dropped to 4.69 percent this week from 4.75 percent last week, Freddie Mac reported Thursday. That marks the lowest level since the company started tracking the data in 1971 and breaks the most recent low set in December. Rates have hovered below 5 percent since early May.</br></br>Yet home sales are tumbling and mortgage applications are slipping. Potential buyers have retrenched, discouraged by employment fears, the recent expiration of a home buyer's tax credit and tough lending standards, industry experts said.</br></br>"Interest rates have no effect on buyer psychology anymore," said Glenn Kelman, chief executive of Redfin, a real estate company. "Now, interest rates fall to the floor and nobody cares."</br></br>The lull in home purchases follows a burst of activity in April and May, when people were rushing to take advantage of the tax credit -- $8,000 for some first-time buyers and $6,500 for certain repeat buyers. To qualify for that subsidy, buyers had to sign a contract by April 30 and they must close the deal by Wednesday.</br></br>As the program wrapped up, home purchases plummeted. Industry figures released this week showed that sales of existing homes fell 2.2 percent in May from April, and government data showed that sales of new homes plunged nearly 33 percent during the same period.