Average US long-term mortgage rates hold firm another week

SILVER SPRING, Md. (AP) — The average interest rate on a long-term mortgage in the U.S. held firm again this week.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year, fixed rate home loan ticked down this week to 3.10% from 3.11% last week. A year ago, the rate stood at 2.71%.

The average rate on a 15-year mortgage also dipped slightly, to 2.38% from 2.39% last week. One year ago, that rate was 2.26%.

Many economists expect U.S. interest rates to rise in coming months as the Fed pivots from the easy money policies it adopted after the coronavirus outbreak ravaged the U.S. economy in the spring of 2020.

Last week, Federal Reserve Chair Jerome Powell hinted that the central bank would shift toward tightening credit more quickly than it previously suggested. Powell said it would be “appropriate” for the central bank to consider accelerating the reduction of its bond purchases at its meeting next week. That could lead to the Fed hiking its benchmark interest rate as early as spring.

The U.S. housing market has seen a surge in demand during the pandemic as people seek more space after spending a big chunk of the past two years working from home. Lured by low interest rates, many prospective homebuyers have been thwarted due to a limited supply of homes for sale and rapidly rising prices. Builders have struggled to keep up with demand as supply chain snarls delay projects.