Average US rate on 30-year mortgage edges up to 3.94 percent

AP News
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Posted: Aug 13, 2015 11:13 AM

WASHINGTON (AP) — Average long-term U.S. mortgage rates edged up this week after three straight weeks of declines. The key 30-year loan rate remained under 4 percent.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 3.94 percent from 3.91 percent a week earlier. The rate on 15-year fixed-rate mortgages increased to 3.17 percent from 3.13 percent.

A solid U.S. employment report for July out last Friday — with employers adding 215,000 jobs and the jobless rate steady at 5.3 percent — means there's a strong chance that the anticipated interest rate increase by the Federal Reserve will occur next month. The Fed has kept its key short-term rate near zero since the financial crisis year 2008.

However, China's sharp and sudden devaluation of its currency against the dollar this week could complicate the Fed's decision on timing of a rate increase. The rising dollar has been hurting U.S. exporters by making their goods costlier abroad. By making Chinese goods comparatively cheaper in the United States, a weaker yuan would push already-low U.S. inflation even lower.

The Fed wants to be "reasonably confident" that inflation is returning to its 2 percent target before raising rates. Inflation has risen just 1.3 percent in the past 12 months.

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 unchanged from last week at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.

The average rate on five-year adjustable-rate mortgages fell to 2.93 percent from 2.95 percent; the fee increased to 0.5 point from 0.4 point. The average rate on one-year ARMs jumped to 2.62 percent from 2.54 percent; the fee was unchanged at 0.3 point.