Average long-term U.S. mortgage rates fell for a third straight week amid anxiety over developments in the U.S. economy that lifted bond prices.
Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage dipped to 3.91 percent this week from 3.98 percent a week earlier. The rate on 15-year fixed-rate mortgages declined to 3.13 percent from 3.17 percent.
Mortgage rates followed the yield on the key 10-year Treasury note, which fell. Bond yields for Treasurys were pushed lower by the increase in bond prices, as investors sought safety in U.S. Treasury bonds.
Investors are closely awaiting the government’s report Friday on July employment, since the jobs data could affect the timing of an anticipated interest-rate increase by the Federal Reserve. The yield on the 10-year Treasury note slipped to 2.27 percent Wednesday from 2.29 percent a week earlier. It eased in trading Thursday morning to 2.26 percent.
The Fed is expected to raise interest rates from record lows sometime this year, having kept its key short-term rate near zero since the crisis year 2008. The only question seems to be when.
A statement the Fed issued last week after ending its latest policy meeting gave no timetable. The central bank signaled that it wants to see further economic gains and higher inflation before raising rates. Many analysts foresee the first hike next month, though Fed Chair Janet Yellen has stressed that any increase will be driven by the latest economic data.
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 points. The fee for a 15-year loan also held steady at 0.6 points.
The average rate on five-year adjustable-rate mortgages remained at 2.95 percent; the fee was unchanged at 0.4 points. The average rate on one-year ARMs rose to 2.54 percent from 2.52 percent; the fee was unchanged at 0.3 points.