News / World

US average 30-year mortgage rate declines to 3.48 per cent

FILE - In this Tuesday, Feb. 16, 2016, photo,

FILE - In this Tuesday, Feb. 16, 2016, photo, "For Sale" signs are stacked up outside a new complex of townhouses in Houston. On Thursday, Sept. 22, 2016, Freddie Mac reports on the week's average U.S. mortgage rates. (AP Photo/Pat Sullivan, File)

WASHINGTON — Long-term U.S. mortgage rates edged lower this week.

Mortgage giant Freddie Mac said Thursday the average for the 30-year fixed-rate mortgage declined to 3.48 per cent from 3.50 per cent last week. The benchmark rate is down from 3.86 per cent a year ago, and is close to its all-time low of 3.31 per cent in November 2012.

The 15-year fixed mortgage rate eased to 2.76 per cent from 2.77 per cent .

Prices of long-term U.S. Treasury bonds rose, pushing their yields lower, as investors awaited the decision of the Federal Reserve Wednesday on interest rates. The Fed kept its key interest rate unchanged but signalled that it likely will raise rates before year's end. Long-term mortgage rates tend to track the yield on 10-year Treasury notes.

The yield on the 10-year notes fell to 1.66 per cent Wednesday from 1.70 per cent a week earlier. It declined further to 1.63 per cent Thursday morning.

Though mortgage rates have been at historically low levels, data issued Thursday showed that Americans retreated from home-buying in August, as a worsening inventory shortage appears to be hurting sales and pushing prices higher.

Sales of existing homes slipped 0.9 per cent last month to a seasonally-adjusted annual rate of 5.33 million, the second straight monthly decline, according to the National Association of Realtors.

Low mortgage rates have combined with an improved job market to bolster demand from possible buyers. But drastically fewer sellers are coming into the market. The number of properties for sale is dwindling despite buyer enthusiasm.

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 rose to 0.6 point this week from 0.5 point last week. The fee for a 15-year loan was unchanged at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.80 per cent , down from 2.82 per cent last week. The fee increased to 0.5 point from 0.4 point.