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30-year mortgages hovering at 3.98%

– The average U.S. rate on 30-year fixed mortgages was mostly unchanged last week, as the cost of home-buying and refinancing stayed near record lows.

Mortgage buyer Freddie Mac said Thursday that the rate on 30-year loans fell slightly to 3.98 percent from 3.99 percent the previous week. In February, the rate dropped to 3.87 percent, the lowest since long-term mortgages began in the 1950s.

The average rate on 15-year fixed mortgages also fell, to 3.21 percent from 3.23 percent. That’s above the record low of 3.13 percent hit last month.

Mortgage rates have been below 4 percent for all but one week since early December. That’s helped lift the outlook for housing after four sluggish years of home sales. Still, most economists expect only modest gains.

January and February made up the best winter for resales in five years, when the housing crisis began. And builders are more confident about the market. In February, they requested the most permits to build single-family homes and apartments in more than three years.

Applications for new mortgages rose in March, according to the Mortgage Bankers Association, and there was a sharp rise in the average loan size, suggesting a bigger appetite for home loans. The average size of mortgage applications has increased by $20,000 since December, to about $235,000 last month.

An improved job market is driving the modest increase in home sales. Employers have added an average 245,000 net jobs a month from December through February. The unemployment rate has dropped from 9.1 percent in August to 8.3 percent in February, the lowest level in nearly three years.

Frank Nothaft, Freddie Mac’s chief economist, said rates were little changed this week amid mixed signals on the health of the economy.

He pointed to minutes from the Federal Reserve’s mid-March meeting, which indicated officials were less inclined to take further action to stimulate the economy. The Fed noted that the job market has strengthened, although it cautioned that the housing market remains depressed.

Home prices continue to fall. Prices tend to lag sales and millions of foreclosures and short sales – when a lender accepts less than what is owed on a mortgage – remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year fixed loans was 0.7. For 15-year fixed loans, the average fell to 0.7 from 0.8.

For five-year adjustable loans, the average rate fell to 2.86 percent from 2.90 percent, and the average fee was unchanged at 0.8.

The average on one-year adjustable loans was unchanged at 2.78 percent, and the average fee was unchanged at 0.6.