Mortgage company Freddie Mac reported Thursday that the nationwide average for a 30-year loan dipped to 4.13 per cent, down from 4.15 per cent last week. The average for the 15-year mortgage, a popular choice for people who are refinancing, edged down to 3.23 per cent, compared with 3.24 per cent last week.
Mortgage rates are below the levels of a year ago, having fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term rates low.
Rates on one-year adjustable rate mortgages were 2.39 per cent this week, down from 2.40 per cent last week, while rates on five-year adjustable rate mortgages were 2.97 per cent, down from 2.99 per cent last week.
At 4.13 per cent, the rate on a 30-year mortgage is down from 4.53 per cent at the beginning of this year. Rates have fallen modestly even though the Fed has been trimming its monthly bond purchases. Fed Chair Janet Yellen told Congress this week that the purchases will likely end altogether at the end of October.
But at the same time, Yellen said during congressional testimony that the Fed still sees the need to keep its benchmark short-term rate at a record low near zero to give the economy support.
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. One point equals 1 per cent of the loan amount.
The average fee for a 30-year mortgage was 0.6 point, down from 0.7 point last week. The fee for a 15-year mortgage was 0.5 point, down from 0.6 point last week.
The average charge for a five-year adjustable rate mortgage was 0.4 point, unchanged from last week. For a one-year ARM, the charge was also 0.4 point, also unchanged from last week.