30-year mortgage rates fell to their lowest in 40 years this week with Freddie Mac reporting a .04% drop from last week to 3.91% 15-year mortgage rates remained stable week-to-week at 3.21%, an all-time low.
Good news on interest rates was accompanied by growing signs that the housing market may be set for a turnaround. The National Association of Realtors reported that sales of existing homes in November were up 4% over the prior month. Increased sales came in the face of declining inventory with the number of homes on the market in the US at 2.58 million, the fewest since May 2005.
"Falling home prices meeting already low interest rates are driving affordability,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York.“Mix that with higher consumer confidence and job growth, and I can see why home sales appear to be lifting off the bottom.”