» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 128 | NO. 121 | Friday, June 21, 2013

US Rate on 30-Year Mortgage Falls to 3.93 Percent

MARCY GORDON | AP Business Writer

Print | Front Page | Email this story | Comments ()

WASHINGTON (AP) — U.S. mortgage rates fell for the first time in seven week, keeping the average on the 30-year fixed loan just under 4 percent. But rates are expected to surge next week, as markets respond to Chairman Ben Bernanke's comments that the Federal Reserve will likely reduce its bond purchases later this year.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan eased to 3.93 percent last week. That's down from 3.98 percent last week but is still the highest level since April 2012.

The rate on the 15-year mortgage fell to 3.04 percent from 3.10 percent. That's the highest since May 2012.

Freddie Mac surveys lenders across the country on Monday through Wednesday each week. Bernanke's comments during a news conference Wednesday afternoon weren't fully reflected in the latest rates.

Concern that the Fed will wind down its bond purchases has pushed mortgage rates higher in recent weeks. Mortgage rates are still low by historical standards, helping sustain the housing recovery that began last year. But a spike in long-term interest rates could drive them higher quickly.

The Fed has been buying $85 billion worth of Treasury and mortgage bonds a month since late last year. The purchases pushed long-term interest rates to historic lows, making mortgages and other consumer and business loans cheaper.

Mortgage rates are expected to rise because they tend to follow the yield on the 10-year Treasury note. The yield on the 10-year note climbed in early trading Thursday to 2.39 percent, its highest level in 15 months. That's up from a low of 1.63 percent last month.

And the yield could go even higher based on Bernanke's remarks that the Fed will begin tapering later this year and could end the program in the middle of next year, provided the economy shows continued strength.

The average mortgage rates do not 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 30-year mortgages rose to 0.8 point from 0.7 point. The fee for 15-year loans was unchanged at 0.7 point.

The average rate on a one-year adjustable-rate mortgage declined to 2.57 percent from 2.58 percent. The fee for one-year adjustable-rate loans was steady at 0.4 point.

The average rate on a five-year adjustable-rate mortgage was unchanged at 2.79 percent. The fee slipped to 0.5 point from 0.6 point.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 75 255 11,693
MORTGAGES 72 295 15,274
FORECLOSURE NOTICES 3 71 2,982
BUILDING PERMITS 198 590 27,844
BANKRUPTCIES 62 280 11,242
BUSINESS LICENSES 35 98 4,136
UTILITY CONNECTIONS 94 516 17,000
MARRIAGE LICENSES 18 80 3,544

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.