Mortgage rates edge down after seven-week rise
| WASHINGTON
U.S.聽mortgage聽rates聽fell for the first time in seven weeks, keeping the average on the 30-year fixed loan just under 4 percent. But聽rates聽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聽buyer Freddie Mac said Thursday that the聽rate聽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聽rate聽on the 15-year聽mortgage聽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聽rates.
Concern that the Fed will wind down its bond purchases has pushed聽mortgage聽rates聽higher in recent weeks.Mortgage聽rates聽are still low by historical standards, helping sustain the housing recovery that began last year. But a spike in long-term interest聽rates聽could drive them higher quickly.
The Fed has been buying $85 billion worth of Treasury and聽mortgage聽bonds a month since late last year. The purchases pushed long-term interest聽rates聽to historic lows, making聽mortgages聽and other consumer and business loans cheaper.
Mortgage聽rates聽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聽mortgage聽rates聽do not include extra fees, known as points, which most borrowers must pay to get the lowest聽rates. One point equals 1 percent of the loan amount.
The average fee for 30-year聽mortgages聽rose to 0.8 point from 0.7 point. The fee for 15-year loans was unchanged at 0.7 point.
The average聽rate聽on a one-year adjustable-rate聽mortgage聽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聽rate聽on a five-year adjustable-rate聽mortgage聽was unchanged at 2.79 percent. The fee slipped to 0.5 point from 0.6 point.
