US long-term mortgage rates rise but remain historically low, as global economic slowdown, trade war weigh on sentiment
- 30-year, fixed-rate mortgage increased to 3.56 per cent from 3.49 per cent last week, Freddie Mac says
Long-term United States mortgage rates rose this week, but remained at historically low levels.
Mortgage buyer Freddie Mac said on Thursday the rate on the 30-year, fixed-rate mortgage increased to 3.56 per cent from 3.49 per cent last week. Average rates on the benchmark loan have remained below 3.6 per cent for four straight weeks – the first time that is happened since the fourth quarter of 2016. A year ago, the 30-year rate stood at 4.6 per cent.
The average rate for 15-year, fixed-rate home loans rose to 3.09 per cent from 3 per cent last week.
Mortgage rates fell sharply over the summer as a slowing global economy and tensions from the trade war between the US and China have caused interest rates on government bonds to tumble. The yields on government bonds, especially the 10-year Treasury note, influence long-term mortgage rates.
The trade concerns have appeared to ease in recent days and sentiment has brightened in global stock markets. Interest rates on government bonds have ticked up. China said on Wednesday that it will exempt US industrial grease and some other imports from tariff increases, although it kept in place penalties on soybeans and other major US exports ahead of negotiations next month.
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As a gesture of goodwill, President Donald Trump said on Twitter that the US had agreed to a two-week delay in a planned increase in tariffs on some Chinese imports. The moves could indicate that both sides are settling in for an extended conflict even as they prepare for talks in Washington aimed at ending the dispute that threatens global economic growth.
Investors continue to expect that the Federal Reserve will cut interest rates at its policymaking meeting next week in another bid by the central bank to help maintain US economic growth. The Fed lowered its benchmark interest rate in July by a quarter point, its first cut in a decade.
Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.
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The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates.
The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.5 point. The average fee for the 15-year mortgage fell to 0.5 point from 0.6 point.
The average rate for five-year adjustable-rate mortgages rose to 3.36 per cent from 3.30 per cent last week. The fee slipped to 0.3 point from 0.4 point.
