Average US rate on 30-year mortgage falls to 3.69 percent

Friday, March 20, 2015, Vol. 39, No. 12

WASHINGTON (AP) — Average long-term U.S. mortgage rates fell this week for a second straight week, edging closer to historically low levels at the start of the spring home-buying season.

Mortgage giant Freddie Mac said Thursday the national average for a 30-year fixed-rate mortgage declined to 3.69 percent from 3.78 percent last week.

The average rate for a 15-year mortgage, popular with homeowners who refinance, eased to 2.97 percent from 3.06 percent last week.

A year ago, the average 30-year mortgage stood at 4.40 percent and the 15-year mortgage at 3.42 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, designed to hold down long-term rates.

The Fed signaled last week that it's still not ready to start raising short-term rates, after keeping them near zero for over six years. Bond investors took the Fed's statement after its policy meeting as a buying signal, and U.S. government bond prices jumped.

That pushed the yield on the 10-year Treasury note below 2 percent. Bond yields fall as prices rise.

Mortgage rates often follow the yield on the 10-year note. It traded at 1.93 percent Wednesday, close to the 1.92 percent it reached after the Fed statement a week earlier. The 10-year note traded at 1.96 percent 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 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage also remained at 0.6 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.92 percent from 2.97 percent. The fee fell to 0.4 point from 0.5 point.

For a one-year ARM, the average rate was unchanged at 2.46 percent. The fee remained at 0.4 point.