Average US 30-year mortgage rises

Average United States rates for fixed mortgages crept higher this week but remained low by historical standards.

According to the Associated Press, mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan increased to 4.48 per cent from 4.47 per cent last week. The average on the 15-year fixed loan rose to 3.52 per cent from 3.51 per cent.

Mortgage rates peaked at 4.6 per cent in August on expectations that the Federal Reserve would reduce its $85bn-a-month in bond purchases. Those purchases push mortgage and other long-term rates lower and encourage borrowing and spending. On December 18, the Fed finally decided the economy was strong enough to allow it to reduce the monthly purchases by $10 billion.

Mortgage rates are sharply higher than they were a year ago when the 30-year fixed rate was 3.35 percent and the 15-year was 2.65 percent.

The Commerce Department reported Tuesday that new-home sales dipped 2.1 per cent in November to a seasonally adjusted 464,000. But stronger figures for the previous three months suggested that housing may be regaining strength after a summer lull.

The National Association of Realtors said last week that the number of people who bought existing homes in November fell for a third straight month. Higher rates and the lingering effects of the partial government shutdown in October may have deterred some sales.

Still, the government said builders broke ground on homes at a seasonally adjusted annual rate of 1.09 million homes and apartments in November. That was the fastest pace since February 2008 and was 23 per cent higher than in October.

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 percent of the loan amount.

The average fee for a 30-year mortgage was 0.7 point. The fee for a 15-year loan was 0.7 point.

The average rate on a one-year adjustable-rate mortgage slipped to 2.56 per cent from 2.57 per cent last week. The fee was 0.5 point.

The average rate on a five-year adjustable mortgage rose to three per cent from 2.96 per cent. The fee was 0.4 point.

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