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Average US rate on 30-year mortgage slips to 4.12 pct.; 15-year loan down to 3.21 pct.

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WASHINGTON - Average U.S. rates on fixed mortgages fell this week for a fifth straight week. The spring home-buying season has started slowly, but it may be aided by the low rates.

Mortgage buyer Freddie Mac said Thursday the average rate for a 30-year loan edged down to 4.12 per cent from 4.14 per cent last week. The average for the 15-year mortgage declined to 3.21 per cent from 3.25 per cent.

Warmer weather has yet to boost home-buying as it normally does. Rising prices and higher interest rates beginning in mid-2013 have made homes less affordable for would-be buyers. At the same time, a limited supply of homes is available to buy. New construction has focused increasingly on rental apartments, instead of single-family homes.

Mortgage rates still are nearly a full percentage point above record lows reached about a year ago.

U.S. home prices rose in March, data released Tuesday showed, but the gains are decelerating as fewer Americans can afford to buy.

The Standard & Poor's/Case-Shiller 20-city home price index rose 12.4 per cent in March compared with 12 months earlier. While healthy, that rate of growth slowed from both February and January.

And more Americans signed contracts to buy homes in April than in the prior month, but the pace of buying is still weaker than last year, according to data issued Thursday by the National Association of Realtors.

The increase in mortgage rates over the past year or so was driven in part by speculation that the Federal Reserve would reduce its bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced four declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.

Fed Chair Janet Yellen has told Congress that the economy is improving but noted that the job market remains "far from satisfactory" and that inflation is still below the Fed's target rate. She said she expects the Fed's near-zero target for short-term rates to remain appropriate for a "considerable time" after the bond purchases end.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 per cent of the loan amount.

The average fee for a 30-year mortgage was unchanged from a week earlier at 0.6 point. The fee for a 15-year loan also held steady, at 0.5 point.

The average rate on a one-year adjustable-rate loan fell to 2.41 per cent from 2.43 per cent. The average fee remained at 0.4 point.

The average rate on a five-year adjustable mortgage was unchanged at 2.96 per cent. The fee slipped to 0.3 point from 0.4 point.

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