A survey released by Freddie Mac, the US government-backed mortgage lender, revealed that this is the lowest rate since records began in 1971.
The news comes hard on the heels of a series of negative data about the US housing market, which this week led to a downturn in the global stock markets.
Deputy chief executive Amy Crews Cutts said: “Existing home sales plunged 27% in July, while new homes fell 12% to a new all-time record low, which led to some market concerns that the housing market may slow the economic recovery.”
Freddie Mac said that mortgage rates have fallen for nine out of the past ten weeks.
However, despite record cheap home finance, the rate at which homeowners are remortgaging to take advantage of lower rates remains sluggish.
With property prices having fallen and standard variable rates remaining relatively cheap, many borrowers in the US (like in the UK) are sitting tight with their existing lender as they may or would not qualify for a new homeloan.
Data company CoreLogic revealed yesterday that 23% of all US residential mortgage borrowers – 11m households – are currently in negative equity, owing more than their properties are worth.
