WASHINGTON — Average U.S. rates on fixed mortgages declined this week, edging closer to historically low levels as the spring home-buying season begins.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year loan fell to 4.34 percent from 4.41 percent last week. The average for the 15-year mortgage eased to 3.38 percent from 3.47 percent.
Mortgage rates have risen about a full percentage point since hitting record lows about a year ago.
The housing market faces a dilemma: Too few people are selling homes. Yet too few buyers can afford the homes that are for sale.
A double-digit jump in the average price of a home sold last year hasn’t managed to coax more homeowners to sell. And combined with higher mortgage rates, higher prices have made homes costlier for first-time buyers as well as for all-cash investors.
Refinancing’s share of mortgage applications fell from 53 percent to 51 percent in the week ended April 4 — the lowest level since July 2009, the Mortgage Bankers Association reported Wednesday.
Average prices nationally are expected to rise by single digits this year. The gains could be strongest in areas with solid job growth, such as Seattle and Austin (Texas).
The increase in mortgage rates over the year was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced three $10 billion declines in its monthly bond purchases since December. The latest plan is to cut its monthly long-term bond purchases to $55 billion because it thinks the economy is steadily healing.
The Fed also said after its two-day policy meeting last month that even after it raises short-term interest rates, the job market strengthens and inflation rises, the central bank expects its benchmark short-term rate to stay unusually low.
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 at 0.7 point. The fee for a 15-year loan remained at 0.6 point.
The average rate on a one-year adjustable-rate mortgage fell to 2.41 percent from 2.45 percent. The average fee rose to 0.5 point from 0.4 point.
The average rate on a five-year adjustable mortgage declined to 3.09 percent from 3.12 percent. The fee held steady at 0.5 point.