October 13, 2016 - 8:32 AM
WASHINGTON - Long-term U.S. mortgage rates rose this week as the prospect of a year-end interest-rate increase by the Federal Reserve grew more likely.
Mortgage giant Freddie Mac said Thursday the average for a 30-year fixed-rate mortgage increased to 3.47 per cent from 3.42 per cent last week. Rates still remain near historic lows. The benchmark 30-year rate is down from 3.82 per cent a year ago and close to its all-time low of 3.31 per cent in November 2012.
The 15-year fixed-rate mortgage, popular with homeowners who are refinancing, ticked up to 2.76 per cent from 2.72 per cent.
The government reported Friday that U.S. employers added 156,000 jobs in September, a decent gain that reflects a steady economy but also a sign that hiring has slowed from its robust pace last year.
The hiring data could keep the Fed on track to raise the short-term interest rate it controls by December. After seven years of pinning that rate at a record low near zero to try to spur more borrowing and spending, the Fed raised its rate modestly in December 2015. It has not acted since.
Prices of long-term U.S. Treasury bonds climbed, pushing their yields lower, as investors grew more certain that the Fed will raise its key rate. The yield on the 10-year Treasury note rose to 1.77 per cent Wednesday from 1.71 per cent a week earlier. It switched course and fell to 1.73 per cent Thursday morning.
While Treasury bond yields are low by historic standards, they're currently at their highest levels since the beginning of June.
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 from 0.5 point last week. The fee for a 15-year loan also increased to 0.6 point from 0.5 point.
Rates on adjustable five-year mortgages averaged 2.82 per cent, up from 2.80 per cent last week. The fee was steady at 0.4 point.
News from © The Associated Press, 2016