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U.S. mortgage rates dropped for a second straight week, remaining below 5 percent, a key level that could boost home loan demand, a closely watched mortgage survey showed on Thursday.
Mortgage rates, however, are widely seen to be on an upward trajectory this year as Federal Reserve asset purchase programs cease and the economy recovers.
Rising mortgage rates do not bode well for the housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.95 percent for the week ended
March 11, down from the previous week's 4.97 percent, according to a survey released by Freddie Mac, the second-largest U.S. mortgage finance company.
That is slightly below the year-ago level of 5.03 percent, but above the record low of 4.71 percent in early December.
Freddie Mac started the survey in 1971.
"During a light week of mixed economic reports, mortgage rates eased somewhat," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
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