WASHINGTON – Average long-term U.S. mortgage rates rose this week for the first time in two months as global economic anxiety and market turbulence eased.
Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage increased to 3.64 per cent from 3.62 per cent last week. The benchmark rate remains below the 3.75 per cent level it marked a year ago.
The average rate on 15-year fixed-rate mortgages edged up to 2.94 per cent from 2.93 per cent last week
Economists saw some positive signs in new data. The U.S. stock market started recouping losses from a brutal start to the year and ended last Friday with a second straight weekly gain. That brought a break in the recent trend of U.S. government bond prices being catapulted higher as investors sought safety.
The decline in U.S. bond prices raised the yields on the bonds, which mortgage rates follow. Yields approached their highest levels in a month. The yield on the 10-year Treasury bond stood at 1.84 per cent Wednesday, up sharply from 1.75 per cent a week earlier. The yield ticked up to 1.85 per cent Thursday morning.
Though markets have stabilized and some economic anxiety has eased, most experts don’t expect the Federal Reserve to raise the short-term interest rate it controls anytime soon, following its rate hike in December.
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 fees for a 30-year mortgage declined to 0.5 point from 0.6 point last week. The fee for a 15-year loan was unchanged at 0.5 point.
Rates on adjustable five-year mortgages averaged 2.84 per cent this week, up from 2.79 per cent last week. The fee remained at 0.5 point.