Average rate on 30-year mortgage slides to 3.95%
Average long-term U.S. mortgage rates slipped this week after they climbed recently expectations that the Federal Reserve may soon raise its key short-term interest rate.
Mortgage buyer Freddie Mac said Wednesday the average rate on a 30-year fixed-rate mortgage slipped to 3.95% from 3.97% a week earlier. The key 30-year rate was nearly unchanged from its level of a year ago, 3.97%. But the average has increased over the past months from 3.76 at the end of October.
The average on 15-year fixed-rate mortgages was unchanged at 3.18% from 3.20.
At a December meeting, Fed officials are expected to raise the federal funds rate — the interest banks charge each other overnight — for the first time in nearly a decade. This crucial short-term rate can influence lending to consumers and businesses such that an increase from the current near-zero level might limit borrowing. Some Fed policymakers have indicated that the 5% unemployment rate and potential for rising inflation levels merit a rate increase, signaling the end of extraordinary stimulus measures that began during the Great Recession.
The average fee for a 30-year mortgage increased to 0.7 point from 0.6 point last week. The fee for a 15-year loan was unchanged at 0.6 point.
The average rate on five-year adjustable-rate mortgages rose 3.01% from 2.98%; the fee was unchanged at 0.5 point. The average rate on one-year ARMs edged down to 2.59% from 2.64%; the fee was unchanged at 0.3 point.
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