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Fixed mortgage rates at record lows

WASHINGTON — Average rates on 30-year and 15-year fixed mortgages dropped to record lows again this week, with the 15-year loan below 3 percent for the first time ever.

Mortgage buyer Freddie Mac said the average rate on the 30-year loan fell to 3.75 percent, from 3.78 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage slipped to 2.97 percent, down from 3.04 percent last week.

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Rates on the 30-year loan have been below 4 percent since early December. The low rates are a key reason the housing industry is showing modest signs of recovery. Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

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Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note, which has fallen this week to a 66-year low. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys rise, the yield falls.

Associated Press