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U.S. rate on 30-year mortgage hits record 3.36 pct.

WASHINGTON – Average U.S. rates on fixed mortgages fell to fresh record lows for the second straight week. The declines suggest the Federal Reserve's stimulus efforts are having an impact.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.36 percent. That's down from last week's rate of 3.40 percent, which was the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, dipped to 2.69 percent, down from last week's record low of 2.73 percent.

The Fed is spending $40 billion a month to buy mortgage-backed securities. The goal is to lower mortgage rates and help the housing recovery. The Fed plans to continue the program until there is substantial improvement in the job market.

The housing market already is benefiting from the lowest mortgage rates on record. Sales of both previously occupied and newly built homes in the U.S. are up from last year. Home prices are rising more consistently. And builders are more confident in the market and are starting to build more homes.

Lower rates are also driving more people to refinance.

Mortgage applications surged 16.6 percent last week, the Mortgage Bankers Association reported Wednesday. Of those applications, 83 percent were to refinance existing loans.

Growth in refinancing could help the broader economy. When people refinance their mortgages at lower interest rates, their monthly payments typically decline. That leaves them with more money to spend. Consumer spending drives nearly 70 percent of economic activity.

Still, some economists question whether further decline in rates will make much of a difference. The average rate on the 30-year fixed mortgage has been below 4 percent since early December. Yet home sales remain below healthy levels. And most people who can qualify have likely already taken advantage of the lower rates.

Many people who would like to refinance or buy a home can't because they fail to meet stricter lending requirements or don't have enough money to make a down payment.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.6 point, unchanged from last week. The fee for 15-year loans slipped to 0.5 point from 0.6.

The average rate on one-year adjustable-rate mortgages fell to 2.57 percent from 2.60 percent. The fee for one-year adjustable rate loans held steady at 0.4 point.

The average rate on five-year adjustable-rate mortgages rose to 2.72 percent from 2.71 percent. The fee remained at 0.6 point.

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