Average US 30-year mortgage edges up to 3.56 percent

AP News
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Posted: Jun 23, 2016 10:57 AM
Average US 30-year mortgage edges up to 3.56 percent

WASHINGTON (AP) — Long-term U.S. mortgage rates rose this week but remain at levels low enough to boost home sales in the spring buying season.

Mortgage buyer Freddie Mac says the average 30-year fixed-rate mortgage edged up to 3.56 percent from a 52-week low of 3.54 percent last week. The rate is down from 4.02 percent a year ago.

The average rate on the 15-year fixed rate mortgage also rose — to 2.83 percent from a 52-week low of 2.81 percent. A year ago, the 15-year rate stood at 3.21 percent.

Worries about the global economy — and specifically that the United Kingdom might vote Thursday to leave the European Union — have sent investors scurrying to the relative safety of U.S. Treasury bonds. Their purchases have driven rates lower. And long-term mortgage rates track the yield on 10-year Treasury notes.

Last week, the Federal Reserve decided to keep short-term rates unchanged at 0.25 percent to 0.50 percent.

"The low rates continue to be good news for the housing market," said Sean Becketti, chief economist at Freddie Mac.

The National Association of Realtors reported Wednesday that sales of existing homes rose in May to the highest level since February 2007. But the Commerce Department reported Thursday that new-home sales dropped 6 percent in May, though they are up 6.4 percent so far this year.

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 rose to 0.6 point from 0.5 point last week. The fee for a 15-year loan was steady at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.74 percent this week, same as last week. The fee remained at 0.5 percent.