US average 30-year mortgage rate declines to 3.44 per cent

WASHINGTON – Long-term U.S. mortgage rates edged lower this week. As rates remain at historically low levels, homeowners taking advantage of the chance to refinance their mortgages have pushed up refinancing activity.

Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage declined to 3.44 per cent from 3.46 per cent last week. The average rate is down from 3.90 per cent a year ago, and is close to its all-time low of 3.31 per cent in November 2012.

The 15-year fixed mortgage rate eased to 2.76 per cent from 2.77 per cent.

The share of refinancing in overall mortgage activity increased to 64 per cent of total applications in the week ended Sept. 2 from 63.5 per cent the previous week, the Mortgage Bankers Association reported Wednesday. The British vote in June to leave the European Union roiled financial markets and drove up prices of U.S. Treasury bonds — lowering their yields with long-term mortgage rates following suit. Since then, refinancing’s share of mortgage activity has stayed above 60 per cent, Freddie Mac noted.

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 rose to 0.6 point this week from 0.5 point last week. The fee for a 15-year loan was unchanged at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.81 per cent, down from 2.83 per cent last week. The fee remained at 0.4 point.