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Thirty-Year Loan Slumps to New Low as Investors Flee Europe

The 30-year fixed-rate mortgage reached a new all-time low Tuesday as concerns grew that Greece would leave the euro zone in a disorderly way.

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Real estate Web site ""Zillow"":http://www.zillow.com/ found the loan at 3.59 percent, down from 3.65 percent last week, the lowest rate recorded by the company since it began tracking interest rates for mortgages in April 2008. This is down from a previous all-time low of 3.65 percent recorded in May.

Mortgage rates zigzagged lower across many states, falling 14 basis points in Massachusetts and 11 basis points in Texas. ""Zillow"":http://www.zillow.com/ found the 15-year loan averaging 2.91 percent, while rates for

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5-year and 1-year adjustable-rate mortgages hovered around 2.57 percent.

""Rates reached a new low on concerns that a disorderly departure of Greece from the euro zone might trigger turmoil in other European economies, pushing more investor demand away from European debt and towards the relative security of U.S. mortgage backed securities and Treasuries,"" ""Erin Lantz"":http://www.zillow.com/profile/Erin-Lantz/, director of Zillow Mortgage Marketplace, said in a statement.

She said that the company expects ""rates to remain at or slightly slow this historically low level as Greece tries to form a new ruling coalition and European policymakers work to prevent worries about Greece from spreading to more systemically important countries.""

A fresh round of concerns sprang from Greece last week, with leftist parties trouncing incumbents but unable to form a majority with other parties to create a coalition government.

The Coalition of the Radical Left, or Syriza, refused to throw its weight behind a coalition government with the New Democracy Party and Socialists.

""_The New York Times_"":http://www.nytimes.com/2012/05/16/world/europe/in-greece-leaders-fail-to-find-consensus-forcing-country-into-new-elections.html?_r=1&hp reports that analysts expect President Karolos Papoulias to shore up a caretaker government Wednesday that would facilitate new elections next month.

With investors fleeing Europe, Treasury yields remain at historic lows, alongside mortgage rates.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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