Average US rate on 30-year mortgage slips to 3.58 per cent

WASHINGTON – Average long-term U.S. mortgage rates edged down this week to their lowest levels of the year, offering a continued incentive for purchasing during the spring home-buying season.

The benchmark 30-year fixed-rate loan touched its lowest point in nearly three years, since May 2013. Mortgage buyer Freddie Mac said Thursday that the average slipped to 3.58 per cent from 3.59 per cent last week. The key rate stood at 3.67 per cent a year ago.

The average rate on 15-year fixed-rate mortgages declined to 2.86 per cent from 2.88 per cent last week.

The continued strong demand for U.S. government bonds, spurred by indications that the Federal Reserve won’t raise the interest rates it controls any time soon, has kept prices of the bonds at high levels. The bonds’ yields, moving in the opposite direction from their prices and influencing mortgage rates, have remained at low levels.

The yield on the 10-year Treasury bond stood at 1.76 per cent Wednesday, unchanged from a week earlier. The yield rose to 1.78 per cent Thursday morning.

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 per cent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan rose to 0.5 point from 0.4 point.

Rates on adjustable five-year mortgages averaged 2.84 per cent this week, up from 2.82 per cent last week. The fee fell to 0.4 point from 0.5 point.