Average long-term U.S. mortgage rates slipped this week after they climbed recently amid expectations that the Federal Reserve may soon raise its key short-term interest rate.
Mortgage buyer Freddie Mac said the average rate on a 30-year fixed-rate mortgage dipped to 3.95 percent from 3.97 percent a week earlier. The key 30-year rate was nearly unchanged from its level of a year ago, 3.97 percent. But the average has increased over the past months from 3.76 percent at the end of October.
The average on 15-year fixed-rate mortgages was unchanged at 3.18 percent, according to Associated Press.
Rates have risen in recent weeks as some of the global economic turmoil has calmed down. Foreign buyers poured into 10-year U.S. Treasury bonds in October, temporarily depressing mortgage rates that have since risen as the market focus has returned to the Fed.
At a December meeting, Fed officials are expected to raise the federal funds rate — the interest banks charge each other overnight — for the first time in nearly a decade. This crucial short-term rate can influence lending to consumers and businesses such that an increase from the current near-zero level might limit borrowing. Some Fed policymakers have indicated that the 5 percent unemployment rate and potential for rising inflation levels merit a rate increase, signaling the end of extraordinary stimulus measures that began during the Great Recession.
