Average 30-year mortgage rate inches up

Rates for 30-year mortgages are climbing skyward even if the Fed isn’t propelling the rise

For the second straight week, average long-term U.S. mortgage rates inched up this week as financial markets awaited the Federal Reserve's crucial decision on interest rates.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage edged up to 3.91 per cent from 3.90 per cent a week earlier. The rate on 15-year fixed-rate mortgages rose to 3.11 per cent from 3.10 per cent.

Capping months of feverish speculation, Fed policymakers may finally raise a key interest rate on Thursday. A rate hike by the Fed could bring higher rates for home loans. The Fed has kept its key short-term rate at a record low near zero since the financial crisis struck seven years ago.

With the job market now considered essentially recovered from the Great Recession, many economists say it's time to start edging toward normal rates. Others argue that many other factors  notably a sharply slowing China, the tumult in markets and persistently less-than-optimal inflation  raise serious concerns. They say the Fed should wait, until later this year or even 2016.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of 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 per cent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan declined to 0.6 point from 0.7 point.

The average rate on five-year adjustable-rate mortgages rose to 2.92 per cent from 2.91 per cent; the fee held steady at 0.5 point. The average rate on one-year ARMs fell to 2.56 per cent from 2.63 per cent; the fee slipped to 0.2 point from 0.3 point.