WASHINGTON – U.S. long-term mortgage rates fell this week, giving an incentive to potential buyers as the spring homebuying season opens.
Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year, fixed-rate mortgage declined to 4.28 per cent from 4.31 per cent the previous week.
Mortgage rates have fallen substantially since the beginning of the year, after climbing for much of 2018 and peaking at nearly 5 per cent in early November. The average rate on the benchmark 30-year loan stood at 4.45 per cent a year ago.
The average rate this week for 15-year, fixed-rate loans slipped to 3.71 per cent from 3.76 per cent a week earlier.
With economic growth showing signs of slowing in the U.S. and abroad, interest rates have eased. Reflecting dimmer expectations for growth, the Federal Reserve left its key interest rate unchanged Wednesday. The Fed kept the rate — which can influence mortgage loans as well as credit cards, home equity lines of credit and more — in a range of 2.25 per cent to 2.5 per cent.
The lower home-lending rates, combined with continued moderation of home prices, should enhance affordability for homebuyers as the season begins, Freddie Mac chief economist Sam Khater said.
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.
The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.4 point. The fee on 15-year mortgages also held steady at 0.4 point.
The average rate for five-year adjustable-rate mortgages was unchanged at 3.84 per cent. The fee remained at 0.3 point.