Average rate on 30-year mortgage falls to 3.62%
WASHINGTON (AP) – Feb. 25, 2016 – Average long-term U.S. mortgage rates fell this week as anxiety over the global economy persisted. Long-term rates resumed their decline after being unchanged last week following six straight weeks of easing.
Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage slipped to 3.62 percent from 3.65 percent last week. That puts it well below the 3.80 percent it marked a year ago.
The average rate on 15-year fixed-rate mortgages declined to 2.93 percent from 2.95 percent last week.
Mortgage rates have continued to fall despite the Federal Reserve’s decision in December to raise the short-term rate it controls for the first time since 2006.
Global economic worries and turbulence in world stock markets have pushed up prices of U.S. government bonds as investors seek safety. That has depressed the yields on the bonds, which mortgage rates follow. The yield on the 10-year Treasury bond has dropped to strikingly low levels below the significant 2-percent mark.
The benchmark yield stood at 1.75 percent Wednesday, down from 1.81 percent a week earlier. The yield fell further to 1.72 percent Thursday morning. That compares with 2.27 percent before the Fed’s rate hike on Dec. 16.
Despite the decline in mortgage rates this year, new government data show that Americans stepped back from buying new homes in January, as purchases plunged sharply in western states where prices are typically higher.
The Commerce Department said Wednesday that new-home sales fell 9.2 percent last month to a seasonally adjusted annual rate of 494,000. Most of the decline stemmed for a 32.1 percent drop in sales in the West. Sales also slipped in the Midwest, while edging up in the Northeast and South.
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 percent of the loan amount.
The average fees for a 30-year mortgage rose to 0.6 point from 0.5 point last week. The fee for a 15-year loan was unchanged at 0.5 point.
Rates on the adjustable five-year mortgage averaged 2.79 percent this week, down from 2.85 percent last week. A year ago, the 5-year ARM averaged 2.99 percent.
The fee on a five-year adjustable-rate mortgage increased to 0.5 point from 0.4 point.
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