Mortgage rates are about a quarter of a percentage point higher than they were at the same time last year. The increase in rates over the past year or so was driven in part by speculation that the Federal Reserve would reduce its bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced five declines in its monthly bond purchases since December because the economy appears to be steadily healing. But the Fed has no plans to raise its benchmark short-term rate from record lows.
After the central bank ended a two-day policy meeting last week, Fed Chair Janet Yellen sent the message that the economy still isn't healthy enough to grow at a consistently strong pace without the Fed's help. Yellen said that despite a steadily improving job market and signs of creeping inflation, the Fed sees no need to raise short-term interest rates from record lows anytime soon.
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 fell to 0.5 point from 0.6 point a week earlier. The fee for a 15-year loan was unchanged at 0.5 point.
The average rate on a one-year adjustable-rate loan slipped to 2.40 percent from 2.41 percent. The average fee remained at 0.4 point.
The average rate on a five-year adjustable mortgage fell to 2.98 percent from 3.00 percent. The fee declined to 0.3 point from 0.4 point.