May 16th, 2014 10:05 AM by Jackie A. Graves, President
(AP) — Average U.S. rates on fixed mortgages declined this week for a third
straight week. The low rates could give a boost to the spring home-buying
season, which has gotten off to a slow start.
buyer Freddie Mac said Thursday that the average rate for a 30-year loan eased
to 4.20% from 4.21% last week. The average for the 15-year mortgage fell to
3.29% from 3.32%.
rates have risen nearly a full percentage point since hitting record lows about
a year ago.
Homebuilders feeling less confident in May
weather has yet to boost home-buying as it normally does. Rising prices and
higher rates have made affordability a problem for would-be buyers. And many
homeowners are reluctant to list their properties for sale.
and construction have faltered since last fall, slowing the economy. A harsh
winter, higher buying costs and a limited supply of available homes have
discouraged many potential buyers. Existing-home sales in March reached their
lowest level in 20 months.
increase in mortgage rates over the year was driven in part by speculation that
the Federal Reserve would reduce its bond purchases, which have helped keep
long-term interest rates low. Indeed, the Fed has announced four declines in
its monthly bond purchases since December because the economy appears to be
steadily healing. But the Fed has no plans to raise its benchmark short-term
rate from record lows.
Janet Yellen has told Congress that the economy is improving but noted that the
job market remains "far from satisfactory" and that inflation is
still below the Fed's target rate. She said she expects the Fed's near-zero
target for short-term rates to remain appropriate for a "considerable
time" after the bond purchases end.
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.
fee for a 30-year mortgage was unchanged from a week earlier at 0.6 point. The
fee for a 15-year loan also remained at 0.6 point.
rate on a one-year adjustable-rate was steady at 2.43%. The average fee rose to
0.5 point from 0.4 point.
rate on a five-year adjustable mortgage fell to 3.01% from 3.05%. The fee
declined to 0.4 point from 0.5 point.