By Canadian Press

US average 30-year mortgage rate rises to 3.46 per cent

Sep 1, 2016 | 7:45 AM

WASHINGTON — Long-term U.S. mortgage rates rose this week amid expectations in financial markets that an increase in interest rates by the Federal Reserve may be on the horizon. Mortgage rates remain at historically low levels, however.

Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage was 3.46 per cent, up from 3.43 per cent last week. The average rate is down from 3.89 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 increased to 2.77 per cent from 2.74 per cent.

Fed Chair Janet Yellen said in a speech last Friday that the case for the Fed raising interest rates has been bolstered by a solid job market and an improved outlook for the U.S. economy and inflation. But she stopped short of offering any timetable. The central bank’s policymakers are scheduled to meet next on Sept. 20-21.

Following Yellen’s speech, investors’ expectations of a possible rate increase pushed the prices of U.S. Treasury bonds lower and drove up their yields.

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Long-term mortgage rates tend to track the yield on 10-year Treasury notes, which rose to 1.58 per cent Wednesday from 1.56 per cent a week earlier. It increased further to 1.60 per cent 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 per cent of the loan amount.

The average fee for a 30-year mortgage fell to 0.5 point this week from 0.6 point last week. The fee for a 15-year loan was unchanged at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.83 per cent, up sharply from 2.75 per cent last week. The fee remained at 0.4 point.

The Associated Press

by Canadian Press

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US average 30-year mortgage rate rises to 3.46 per cent

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