Average Rate on 30-Year Mortgage Slips to 4.31%

mortgages interest rates home sales housing market loans
Jonathan Alcorn/Bloomberg via Getty Images

WASHINGTON -- Average rates on U.S. fixed mortgages fell for the second straight week, a welcome sign for homebuyers hoping to lock in lower rates that had spiked earlier this month.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan fell to 4.31 percent. That's down from 4.37 percent last week but nearly a full percentage point higher than in early May. The rate reached a two-year high of 4.51 percent two weeks ago.

The average on the 15-year fixed loan declined to 3.39 percent, down from 3.41 percent last week

While rates remain low by historical standards, they have risen in recent weeks after the Federal Reserve indicated it might slow its bond purchases later this year. The $85-million-a-month in bond purchases have kept long-term interest rates low, encouraging more borrowing and spending.

Mortgage rates tend to follow the yield on the 10-year Treasury note, which rose sharply after Chairman Ben Bernanke said the Fed might reduce its bond-buying program. But the yield has since stabilized after Bernanke and other members emphasized that any change in the bond purchases would be tied to the economy's health -- not a calendar date.

Further, Bernanke said the Fed would likely continue other low-interest rate policies for the foreseeable future because unemployment remains high and inflation low.

Low mortgage rates have contributed to a housing recovery that has helped drive economic growth this year.

Greater demand, along with a tight supply of homes for sale, has pushed up home prices. It also has led to more home construction, which has created more jobs.

This week the government said sales of new homes rose 8.3 percent to a seasonally adjusted annual rate of 497,000, the highest since May 2008.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through 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 0.8 point this week, up from 0.7 point last week. The fee for a 15-year loan also rose to 0.8 point from 0.7 point.
  • The average rate on a one-year adjustable-rate mortgage fell to 2.65 percent from 2.66 percent. The fee was unchanged at 0.4 point.
  • The average rate on a five-year adjustable mortgage eased to 3.16 percent from 3.17 percent. The fee rose to 0.7 point from 0.6.

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December 22 2013 at 2:08 AM Report abuse rate up rate down Reply
The Paterfamilia

Home builders know this and have stalled on building new homes that will just sit and get old again... This is because when a real economic gain is felt by Consumers, they will actually come to the market and then so will THOUSANDS of Existing Homes that will actually cut Prices...

They call this the Financial News? Sounds a lot like Disinformation and Hype Straight from the Desk of a Wall Street Banker... Make them pay for advertising their views, OH YEAH!!! I forgot this is a Main Stream Media CORPORATIONS ARE PEOPLE TOO Dumb down Americans issued Talking Point...

July 25 2013 at 3:32 PM Report abuse +1 rate up rate down Reply
The Paterfamilia

SLIPS? Just last month the rate was 25% less than your todays quote... All I have read in this Column has been Real Estate Brokers protesting how home owners, who pay their salaries are in a out of control BUBBLE from increasing just 1% a month in the best areas...

These Wall Street Bankers, get almost a ZERO PRIME RATE and where responsible for misrepresenting inflated Values and deflated Risk on packaged loans that caused Home Owners to lose THOUSANDS in equity... Thousands in Savings and Retirement Money as the Fed Printed Billions more Dollars to bail their Corrupt A$$ES out... These same Bankers still Foreclosed and are now in RECORD PROFITS, the Fed is still buying the bonds that pool the TRILLIONS they won't Loan except to Venture Capitalist that get Insider Trader-Like deals!!!

Talking Insider Trades, the FED Chair come out and drops the very info about his thoughts... Of just TAPERING Bond Buying within a Year, or so, THAT HE RECANTED and it only "SLIPS" a TENTH OF A PERCENT? You want us to do Cartwheels? WOW, what a Story that is not told and instead we get Disinformation and Hype!!!


July 25 2013 at 3:17 PM Report abuse +1 rate up rate down Reply