Average rate on 30-year mortgage falls to 3.63 pct.; lowest since May 2013

WASHINGTON – Average long-term U.S. mortgage rates fell for the fourth straight week, with the benchmark 30-year rate again marking its lowest level since May 2013. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped further below 3 per cent.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage declined to 3.63 per cent this week from 3.66 per cent this week last week. The rate for the 15-year loan slipped to 2.93 per cent from 2.98 per cent last week.

A year ago, the average 30-year mortgage stood at 4.39 per cent and the 15-year mortgage at 3.44 per cent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The drop in mortgage rates has come as bond yields have hit record low levels. Mortgage rates often follow the yield on the 10-year Treasury note, which has fallen below 2 per cent. Bond yields fall as prices rise.

The 10-year note traded at 1.87 per cent Wednesday, up from 1.84 per cent a week earlier but still at a historically low level. It dropped to 1.86 per cent from 1.94 per cent after Europe’s central bank announced a plan aimed at reviving that region’s struggling economy.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of 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 0.7 point, up from 0.6 point last week. The fee for a 15-year mortgage rose to 0.6 point from 0.5 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.83 per cent from 2.90 per cent. The fee remained at 0.4 point.

For a one-year ARM, the average rate was unchanged at 2.37 per cent. The fee held at 0.4 point.