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Rate for 30-year fixed mortgage, with slight drop, stays below 4%

The average rate on a 30-year fixed mortgage was mostly unchanged this week nationwide, as the cost of homebuying and refinancing stayed near record lows.

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

The average rate on the 15-year fixed mortgage 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 has 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.

The number of 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.

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. The housing crisis and the recession have prompted many Americans to rent instead of buy, which has led to a drop in homeownership.