Long-term U.S. mortgage rates fell this week for a second straight week, slipping further from their highest levels of the year reached two weeks ago.
Mortgage buyer Freddie Mac said Thursday that the rate on 30-year fixed-rate home loans declined to 4.14 percent from 4.23 percent last week. The benchmark rate stood at 3.71 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.
The rate on 15-year mortgages eased to 3.39 percent from 3.44 percent.
Despite the run-up in mortgage rates that started after the November election, Americans stepped up home buying in January. Many buyers likely sought to close their deals before rates increased further. The Federal Reserve raised its key interest rate on March 15 for only the third time since 2006, but economists at S&P Dow Jones Indices say higher rates won’t slow home sales until later this year.
Data issued on Tuesday showed that U.S. home prices jumped in January from a year earlier at the fastest pace in nearly 2 ½ years, as a tight supply of houses for sale spurred bidding wars in many cities. The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index increased 5.7 percent in January, the most since July 2014.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday 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 this week at 0.5 point. The fee on 15-year loans slipped to 0.4 point from 0.5 point last week.
Rates on adjustable five-year loans tumbled to 3.18 percent from 3.24 percent. The fee remained at 0.4 point.