Average US 30-year loan rate falls to 3.80 percent
Dec. 18, 2014
WASHINGTON (AP) — Average U.S. long-term mortgage rates fell this week, with the benchmark 30-year loan rate reaching a new low for the year.
The rates' historically low levels could be a boon to potential homebuyers. Mortgage company Freddie Mac says the nationwide average for a 30-year mortgage dropped to 3.80 percent this week from 3.93 percent last week. It is now at its lowest level since May 2013.
At the beginning of the year, the 30-year rate stood at 4.53 percent.
The average for a 15-year mortgage, a popular choice for people who are refinancing, declined to 3.09 percent from 3.20 percent last week.
Mortgage rates often follow the yield on the 10-year Treasury note, which also has fallen to its lowest levels since May 2013. It traded at 2.14 percent Wednesday, down from 2.17 percent a week earlier. The 10-year note traded at 2.21 percent Thursday morning. Bond yields rise as prices fall.
The recent decline in mortgage rates has come despite the October end of the Federal Reserve's monthly bond purchases, which were intended to keep long-term interest rates low. The central bank is edging closer to raising interest rates from record lows given a strengthening U.S. economy, but the Fed said Wednesday that it will be "patient" in deciding when to do so. Chair Janet Yellen said she foresaw no rate hike in the first quarter of next year.
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 rose to 0.6 point from 0.5 point last week. The fee for a 15-year mortgage also increased to 0.6 point from 0.5 point.
The average rate on a five-year adjustable-rate mortgage fell to 2.95 percent from 2.98 percent. The fee was unchanged at 0.5 point.
For a one-year ARM, the average rate declined to 2.38 percent from 2.40 percent. The fee held at 0.4 point.