U.S. mortgage rates lowest level this year

Average 30-year fixed rate mortgage

According to Freddie Mac, the average 30-year fixed rate mortgage was 4.74 percent this week. That is down from last week's rate of 4.84 percent. The company reports that last year this time the rate was 4.91 percent.

This week's rate is the lowest it has been since early December 2009.

A campaign by the Federal Reserve to reduce borrowing costs for consumers pushed rates down to extraordinarily low levels last year. Rates were expected to rise after the program ended this spring. Instead, they have dipped. Fears that Greece's government would default on its debt shook world markets and boosted demand for U.S. Treasury notes.

“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist.

Opportunity may not last - analysts

Analysts say the opportunity may not last. If Europe's woes subside and the U.S. economic recovery stays on track, rates are likely to move higher. That's because traders will move their money back into riskier investments, the Associated Press reports.

"Strike now," said Greg McBride, senior financial analyst at Bankrate.com. "If they move quickly against you, it just takes money right out of your pocket," according to reporting by the Associated Press.

Homeowners appear to be taking notice. Applications to refinance surged this week to the highest level since October 2009, the Mortgage Bankers Association said Wednesday.

The fee or points for the 30-year fixed rate mortgage was 0.7 percent.

Other mortgage rates

The average rate for the 15-year fixed rate mortgage was 4.21 percent, with 0.7 percent point, while the 5-year adjustable rate mortgage averaged 3.97 percent with 0.7 percent point.