Thursday, March 17, 2016
WASHINGTON (AP) — Average long-term U.S. mortgage rates rose this week for the third straight week. Long-term rates have reversed the upward trend that took hold at the start of the year amid economic anxiety and market turbulence.
Rates still remain at historically low levels, however, at the start of the spring home buying season. Mortgage buyer Freddie Mac said today the average rate on a 30-year, fixed-rate mortgage increased to 3.73 percent from 3.68 percent last week. The benchmark rate is closer to yet still below the 3.78 percent level it marked a year ago.
The average rate on 15-year fixed-rate mortgages rose to 2.99 percent from 2.96 percent last week.
The Federal Reserve decided this week to keep a key interest rate unchanged in light of global pressures that risk slowing the U.S. economy. As a result, Fed officials expect to raise rates more gradually this year than they had envisioned in December. The officials now foresee two, rather than four, modest increases in the benchmark short-term rate during 2016.
Prices of U.S. government bonds rose sharply after the Fed decision was announced Wednesday, reversing a decline in prices earlier in the week. The increase in bond prices pushed down the yields on the bonds, which mortgage rates track. The yield on the 10-year Treasury bond stood at 1.91 percent Wednesday, down from 1.97 percent Tuesday but above 1.88 percent a week earlier. The yield was unchanged at 1.91 percent this morning.