WASHINGTON – Long-term U.S. mortgage rates rose this week, lifting from their 2016 lows but remaining historically low during the spring home-buying season.
Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage increased to 3.66 per cent from 3.59 per cent last week. That brought it close to its level a year ago of 3.68 per cent.
The average rate on 15-year fixed-rate mortgages advanced to 2.89 per cent from 2.85 per cent last week.
Prices of U.S. government bonds remained at high levels, amid signs that the Federal Reserve won’t raise the interest rates it controls in the immediate future. That means low levels for the bonds’ yields, which move in the opposite direction from their prices and tend to influence mortgage rates.
The bonds’ prices rose after the Fed said Wednesday that it was keeping its benchmark rate unchanged after having raised it from record lows in December. The central bank’s policymakers also made clear that their next move will be another increase, but some economists believe it may not be until the second half of the year before the Fed raises rates again.
The yield on the 10-year Treasury bond stood at 1.85 per cent Wednesday, ticking up from 1.84 per cent a week earlier and up sharply from 1.76 per cent two weeks before. The yield edged up to 1.86 per cent Thursday morning.
The spring home-buying season has gotten off to a solid start. More Americans signed contracts to buy homes in March, new data issued Wednesday by the National Association of Realtors showed. The group’s seasonally-adjusted pending home sales index rose 1.4 per cent to 110.5, the highest level since May 2015.
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 0.6 point, unchanged from last week. The fee for a 15-year loan rose to 0.6 point from 0.5 point.
Rates on adjustable five-year mortgages averaged 2.86 per cent this week, up from 2.81 per cent last week. The fee was steady at 0.5 point.