Average US rate on 30-year mortgage edges up to 3.68 per cent

WASHINGTON – Average long-term U.S. mortgage rates rose this week for only the second time this year.

It was the second straight weekly increase for long-term loan rates, which had declined since the start of the year amid global economic anxiety and market turbulence. Rates still remain at historically low levels at the start of the spring home buying season.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage edged up to 3.68 per cent from 3.64 per cent last week. The benchmark rate remains below the 3.86 per cent level it marked a year ago.

The average rate on 15-year fixed-rate mortgages increased to 2.96 per cent from 2.94 per cent last week.

Economists are seeing some positive signs in new data. A robust U.S. employment report for February, issued by the government last Friday, highlighted a resilient U.S. economy just as fears of a new recession had begun to surface.

U.S. employers sent a clear message of confidence last month. They added a healthy 242,000 jobs, while the unemployment rate held at a low 4.9 per cent. The gains showed that the economy is surmounting its challenges without suffering much damage.

As economic anxiety has eased, U.S. government bond prices have reversed their upward trend that started the year.

The decline in U.S. bond prices has raised the yields on the bonds, which mortgage rates follow. The yield on the 10-year Treasury bond stood at 1.88 per cent Wednesday, up from 1.84 per cent a week earlier. The yield ticked up to 1.89 per cent Thursday morning.

Though markets have stabilized and some economic worry has abated, most experts don’t expect the Federal Reserve to raise the short-term interest rate it controls at its policy meeting next week. In December, the Fed increased the rate from a record low near zero for the first time in seven years.

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 remained at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.92 per cent this week, up from 2.84 per cent last week. The fee declined to 0.4 point from 0.5 point.