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US mortgage rates fall for second week to hold at 20-month low

[BOSTON] US mortgage rates fell for a second week, holding at the lowest level in more than a year and a half, as declining financing costs boost loan demand.

The average rate for a 30-year fixed mortgage fell to 3.66 per cent from 3.73 per cent last week, Freddie Mac said in a statement on Thursday.

The average 15-year rate declined to 2.98 per cent from 3.05 per cent, the McLean, Virginia-based mortgage- finance company said. Both are the lowest since May 2013.

Consumers, returning from the holidays, have taken advantage of dropping rates to purchase and refinance homes. The Mortgage Bankers Association's loan applications index jumped 49 per cent in the period ended Jan 9 after an 11 per cent increase the prior week, the Washington-based group said on Wednesday

"It's difficult to make a case that it's not beneficial," Paul Diggle, US property economist for Capital Economics Ltd in London, said in a telephone interview on Wednesday.

"This is another boost for activity levels." The housing market is in a "slow and steady progression," with choppiness in demand, Lennar Corp said on Thursday.

The company, the largest US homebuilder by market value, reported an almost 50 per cent jump in fiscal fourth-quarter profit, even as it increased incentives to boost sales.

KB Home, a Los Angeles-based builder, fell the most in more than two decades this week after saying profitability in 2015 will be restricted by flattening prices and land costs.