Average 30-year mortgage rate down to 4.34 pct.

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.

More in Herald Business Journal

Best foot forward: Ferndale company to make custom shoes easy

Long specializing in insoles, Superfeet is putting 3-D machines in stores to make customized shoes.

Does a hypersonic US reconnaissance plane already exist?

A Skunk Works executive speaks of the top secret aircraft as if it is already in operation.

Alaska Airlines has selected destinations for new service from Paine Field. (Alaska Airlines)
Alaska Airlines will fly from Everett to 8 West Coast cities

Two destinations that didn’t make the list were Spokane and Hawaii.

Port of Everett CEO Les Reardanz has been called up and will be spending much of the year away from his office. He is going to Afghanistan. (Dan Bates / The Herald)
Port of Everett CEO reporting for duty — in Afghanistan

Les Reardanz has been called to active duty with the Navy for an eight-month deployment.

Boeing opens new $17 million training center in Auburn

Workers and dignitaries marked the grand opening of the facility Monday.

Trump’s company fights efforts to shed the president’s name

“Our homes are worth more without the Trump name.”

Airbus floats shutdown of A380 superjumbo

The aircraft is so big that some airports had to expand runways to accommodate the 550-seat plane.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

Why 7-Eleven, inventor of the Slurpee, is going organic

As sales of gas, cigarettes and soda plummet, stores to offer “better-for-you” products.

Most Read