Record-Low Mortgage Rates Ring In New Year

Uncertainty in the markets helped ring in the New Year with record lows for mortgage rates, as concerns over debt crises and job growth lingered for wary investors.

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Finance Web site ""Bankrate.com"":http://www.bankrate.com/ and mortgage company ""Freddie Mac"":http://www.freddiemac.com/ released their findings for mortgage rates Thursday in two separate weekly surveys.

Bankrate.com reported interest rates for the 30-year loan hitting a record 4.18 percent this week, down from 4.21 percent last week. Freddie likewise found rates for the 30-year fixed-rate mortgage sliding from 3.95 percent last week to 3.91 percent this week.

For Freddie, the 15-year fixed-mortgage averaged 3.23 percent this week, down from 3.24 percent seen last week. Bankrate.com fielded another record low in 3.40 percent this week, a decline from 3.44 percent last week.

Bankrate.com said in a statement that ""two potential catalysts"" remain in the form of an extended debt crisis in Europe and whichever figures arise from a report on job growth from December last year.

News that the U.S. economy added 140,000 jobs in November

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helped rally higher figures for home sales, prices, and construction to end tumultuous 2011 on a sounder note for 2012.

An ""employment report"":http://www.adpemploymentreport.com/pdf/FINAL_Report_December_11.pdf by ""ADP"":http://www.adp.com/ helped raise expectations Thursday by fielding an estimated 325,000 jobs in net growth for December, the largest monthly gain since December 2010.

""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist for Freddie, said in a statement that higher figures for the markets suggest ""the housing market and manufacturing industry are showing signs of improvement.""

He cited a 7.3-percent surge in pending-home sales, as reported by the ""National Association of Realtors"":http://www.realtor.org/ Wednesday, as one of a few reasons why conditions could be on the way up for housing.

Despite the figures, crisis remains prevalent in European Union member states. ""_Reuters_"":http://www.reuters.com/article/2012/01/05/us-markets-global-idUSTRE7BB02E20120105 reports that Italy and Spain ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the next two nations at risk for sovereign defaults and downgrades ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô will issue bonds next week, even while debt auctions fail to inspire investors and the value of the euro continues to decline.

Experts speaking with _MReport_ for past stories said that less confidence in Europe drives investors to U.S. Treasury debt, widening yields and pushing mortgage rates, such as those seen Thursday, even lower than usual.

Freddie reported 5-year Treasury-indexed adjustable-rate mortgages (ARMs) dipping to 2.86 percent this week, down from 2.88 percent last week, as the 1-year ARM likewise fell to 2.78 percent from 2.80 percent over the same time frame.

Bankrate.com offered mixed reviews for the same, with 5-year and 1-year ARMs falling to 3.19 percent this week from 3.20 percent last week, roughly compared with a climb to 3.77 percent by the 10-year ARM.