NEWS
04/07/2016 11:11 EDT | Updated 04/08/2017 01:12 EDT

Average US rate on 30-year mortgage falls to 3.59 per cent

WASHINGTON — Average long-term U.S. mortgage rates slid this week to their lowest level since February 2015, luring prospective purchasers during the spring home-buying season.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage fell to 3.59 per cent from 3.71 per cent last week. The benchmark rate was far below the 3.66 per cent level it marked a year ago.

The average rate on 15-year fixed-rate mortgages declined to 2.88 per cent from 2.98 per cent last week.

A recent speech by Federal Reserve Chair Janet Yellen reaffirmed the Fed's plans to move slowly in raising the interest rates it controls. That prospect has tamped down mortgage rates.

The signals on Fed interest-rate policy touched off a steep increase in prices of U.S. government bonds. The bonds' yields, moving in the opposite direction from their prices and influencing mortgage rates, fell sharply.

The yield on the 10-year Treasury bond stood at 1.76 per cent Wednesday, down from 1.83 per cent a week earlier. The yield slipped further to 1.72 per cent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of 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 unchanged from last week at 0.5 point. The fee for a 15-year loan also held steady, at 0.4 point.

Rates on adjustable five-year mortgages averaged 2.82 per cent this week, down from 2.90 per cent last week. The fee remained at 0.5 point.

The Associated Press