Average U.S. rates on fixed mortgages moved closer to their record lows this week, a trend that has made home buying more affordable and helped sustain a housing recovery.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan slipped to 3.34 percent from 3.35 percent last week. That's near the 3.31 percent rate reached in November, the lowest on records dating to 1971.
The average on the 15-year fixed mortgage ticked down to 2.64 percent from 2.65 percent last week. The record low is 2.63 percent.
The 30-year fixed mortgage rate averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac.
Cheaper mortgages are a key reason the housing market began to come back last year and many economists predict the recovery will strengthen in 2013.
In November, sales of previously occupied homes rose to their highest level in three years, while new-home sales reached a 2½-year high. Home prices are steadily increasing, which makes consumers feel wealthier and more likely to spend.
Another reason for the recovery: the nation doesn't have enough houses for sale. The number of new homes available for sale at the end of November was just slightly above the lowest on records dating to 1963. And the supply of previously occupied homes for sale was at an 11-year low that month.
A limited supply has created demand for new construction, which has made builders more confident.
Lower mortgage rates also have persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money to meet larger down payment requirements.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week. The average doesn't 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 0.7 point, unchanged from last week. The fee for 15-year loans edged down to 0.6 from 0.7 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.57 percent from 2.56 percent. The fee for one-year adjustable-rate loans dipped to 0.4 from 0.5 point.
The average rate on a five-year adjustable-rate mortgage ticked up to 2.71 percent from 2.70 percent last week. The fee declined to 0.6 point from 0.7.