Mortgage Rates in U.S. Decline to Record Low of 4.78% (Brian Louis)

  April 2 (Bloomberg) -- Fixed mortgage rates in the U.S. fell to a record low for the second consecutive week, signaling that Federal Reserve Chairman Ben Bernanke’s effort to spur the housing market is gaining traction.

  The 30-year rate dropped to 4.78 percent from 4.85 percent a week earlier, Freddie Mac said today in a statement. The rate is the lowest in Freddie Mac’s records dating to 1971.

  Rates are falling to historic lows after the Federal Reserve said on March 18 it planned to boost purchases of mortgage-backed bonds to support home lending. Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing.

  “Lower rates will help increase demand for homes,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We need to see stronger demand for homes to help end the housing correction.”

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