Average US rate on 30-year mortgage eases to 4.20 percent; 15-year loan at 3.36 percent



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In this Aug. 14, 2014 photo, realty signs stand outside a gated townhome community in Santa Fe Springs, Calif. Freddie Mac reports on average U.S. mortgage rates for this week on Thursday, Sept. 25, 2014. (AP Photo/Jae C. Hong)


WASHINGTON — Average long-term U.S. mortgage rates declined slightly this week, after marking their largest one-week gain of the year the previous week.

Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan eased to 4.20 percent from 4.23 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped to 3.36 percent from 3.37 percent.

At 4.20 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end next month.

Last week, the average rate on the 30-year loan jumped to 4.23 percent from 4.12 percent a week earlier, amid market speculation that the Fed might abandon its nearly 6-year-old policy of keeping short-term interest rates at record lows. But at their meeting that ended last Wednesday, Fed policymakers decided to keep the low rates, at least for a few more months.

Fewer Americans bought homes in August, as investors retreated from real estate and first-time buyers remained scarce, data released Monday by the National Association of Realtors showed.

By contrast, the Commerce Department reported Wednesday that sales of newly constructed homes surged in August, led by a wave of buying in the West and Northeast. It was the fastest sales pace since May 2008. It was seen as a clear sign of improvement for a real estate market that has been muddled in recent months, as the rebound in home sales that followed the housing bust began to slow.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday 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 percent 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 mortgage also remained at 0.5 point.

The average rate on a five-year adjustable-rate mortgage rose to 3.08 percent from 3.06 percent. The fee declined to 0.4 point from 0.5 point.

For a one-year ARM, the average rate was unchanged at 2.43 percent. The fee held at 0.4 point.

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