Average Rate on 30-Year Mortgages Falls to 3.61 Percent



Long-term U.S. mortgage rates fell this week, following the Federal Reserve’s decision not to raise its benchmark interest rate.

The decline put long-term mortgage rates near their low levels for the year, offering an inducement to prospective home buyers during the spring buying season.

Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage declined to 3.61 percent from 3.66 percent last week. It’s far below its level a year ago of 3.80 percent.

The average rate on 15-year fixed-rate mortgages slipped to 2.86 percent from 2.89 percent last week.

Prices of U.S. government bonds remained at high levels after the Fed decided last week not to increase the benchmark interest rate — which it had raised from record lows in December. Some economists believe the Fed may not raise rates again until the second half of the year.

That means low levels for the bonds’ yields, which move in the opposite direction from their prices and tend to influence mortgage rates.

The yield on the 10-year Treasury bond stood at 1.77 percent Wednesday, down sharply from 1.85 percent a week earlier. The yield rose to 1.79 percent Thursday morning.

Deepening investors’ concern over the state of the economy, and helping lift bond prices, was a dismal report on job creation issued Wednesday by payroll processor ADP. It showed that U.S. companies hired workers in April at the slowest pace in three years, a sign that slower growth and whipsawing financial markets could be weighing on hiring.

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 0.6 points, unchanged from last week. The fee for a 15-year loan declined to 0.5 points from 0.6 points.

Rates on adjustable five-year mortgages averaged 2.80 percent this week, down from 2.86 percent last week. The fee was steady at 0.5 points.

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