Average US rate on 30-year mortgage falls to 3.59 pct.

AP News
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Posted: Feb 05, 2015 11:38 AM
Average US rate on 30-year mortgage falls to 3.59 pct.

WASHINGTON (AP) — Average long-term U.S. mortgage rates fell this week, resuming their downward trend of this year after rising slightly last week. Rates are near historically low levels.

Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year mortgage declined to 3.59 percent from 3.66 percent last week. The average rate is at its lowest level since May 2013.

The rate for the 15-year loan, a popular choice for people who are refinancing, eased to 2.92 percent from 2.98 percent last week.

A year ago, the average 30-year mortgage stood at 4.23 percent and the 15-year mortgage at 3.33 percent. 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 Fed sent a message last week that it will be "patient" in raising interest rates from record lows despite the steadily brightening outlook for the economy. The central bank indicated that no rate hike is likely soon because inflation remains well below its target rate.

Real estate data released Tuesday showed that U.S. home prices rose at a modest pace in December, a sign that there are too few potential buyers to bid up prices.

Data provider CoreLogic said home values rose 5 percent in December from 12 months earlier. That was down from the 5.5 percent price gain recorded in November, and it's much lower than the double-digit gains recorded last year. Those much larger increases in early 2014 priced many potential buyers out of the market.

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 fee for a 30-year mortgage was 0.7 point, up from 0.6 point last week. The fee for a 15-year mortgage increased to 0.6 point from 0.5 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.82 percent from 2.86 percent. The fee was unchanged at 0.4 point.

For a one-year ARM, the average rate ticked up to 2.39 percent from 2.38 percent. The fee remained at 0.4 point.