U.S. 30-year mortgage falls to 1971 low

The average rate on a 30-year fixed U.S. mortgage has fallen to its lowest level on records dating to 1971.

The rate on the most popular mortgage dipped to 4.15 per cent from 4.32 per cent a week ago, mortage lender Freddie Mac said Thursday. Its previous low of 4.17 percent was reached in November.

The last time long-term rates were lower was in the 1950s, when 30-year loans weren't widely available. Most long-term home loans lasted 20 or 25 years.

Few expect record-low rates to energize the depressed U.S. home market. Over the past year, the average rate on the 30-year fixed mortgage has been below five per cent for all but two weeks. Yet prices and sales remain unhealthy and are holding back the overall economy.

Five years ago, the average 30-year fixed rate was near 6.5 per cent. In 2000, it exceeded eight per cent.

Most homeowners are paying rates more than a full percentage point higher than the current average. The average rate on all outstanding mortgages is 5.3 per cent, Freddie Mac said, citing data from the Bureau of Economic Analysis.