Average US rate on 30-year mortgage falls to 52-week low 4.10 pct.; 15-year loan at 3.23 pct

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WASHINGTON – Average long-term U.S. mortgage rates declined this week, with the 30-year loan rate hitting its 52-week low.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage fell to 4.10 per cent from 4.12 per cent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped to 3.23 per cent from 3.24 per cent.

Mortgage rates have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.

Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.43 per cent Wednesday, close to its low for the year of 2.41 per cent. It was trading at 2.42 per cent at midday Thursday. Bond yields rise when bond prices fall.

At its 52-week low of 4.10 per cent, the rate on a 30-year mortgage is down from 4.53 per cent at the start of the year. Rates have fallen even though the Fed has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end in October.

The low rates appear to have boosted U.S. home sales. Data released Thursday showed that sales of existing homes rose for the fourth straight month in July to their highest level in nearly a year, the latest sign that the housing recovery is picking up after stumbling at the start of the year.

The National Association of Realtors said home sales rose 2.4 per cent to a seasonally-adjusted annual rate of 5.15 million, the highest since last September.

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 0.5 point, down from 0.6 point last week. The fee for a 15-year mortgage was unchanged at 0.6 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.95 per cent from 2.97 per cent. The fee remained at 0.5 point.

For a one-year ARM, the average rate rose to 2.38 per cent from 2.36 per cent. The fee was stable at 0.5 point.

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