WASHINGTON (AP) — Average U.S. rates on fixed mortgages declined last week, edging closer to historically low levels.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year loan fell to 4.32 percent from 4.37 percent last week. The average for the 15-year mortgage eased to 3.32 percent from 3.38 percent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago.
The increase 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.
Deeming the economy to be gaining strength, the Fed announced in December and January — and again on Wednesday — that it was reducing its monthly bond purchases.
The Fed said after its latest two-day policy meeting 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.
Fed Chair Janet Yellen stressed that with the job market still weak, the Fed intends to keep short-term rates near zero for a "considerable" time and would raise them only gradually. Yellen also suggested that the Fed could start raising rates six months after it halts its monthly bond purchases, which most economists expect by year's end. That means short-term rates could rise by mid-2015.
The National Association of Realtors reported Thursday that sales of U.S. existing homes slipped in February, the sixth decline in seven months as severe winter weather, rising prices and a tight supply of homes discouraged buyers.