ECONOMY

US average 30-year mortgage rate edges up to 4.16 percent

Long-term U.S. mortgage rates rose slightly this week, continuing a holding pattern that has prevailed this month.

Mortgage buyer Freddie Mac said Thursday that the rate on 30-year, fixed-rate loans edged up to 4.16 percent from 4.15 percent last week. The benchmark rate stood at 3.62 percent a year ago and averaged 3.65 percent through 2016, the lowest level in records dating to 1971.

The rate on 15-year mortgages rose to 3.37 percent from 3.35 percent last week.

Mortgage rates surged in the weeks following President Donald Trump's election in November. Investors bid rates higher because they expect Trump's plans to cut taxes and increase spending on roads, bridges and airports will drive up economic growth and inflation.

But mortgage rates reversed course in the first week of the year, falling after nine straight weeks of increases. They have moved little in the past four weeks.

The economy has been showing solid gains but there is uncertainty around the new Trump administration and its economic policies. Federal Reserve policymakers early this month decided to leave a key interest rate unchanged. But they discussed the need to raise the rate again "fairly soon," especially if the economy remains strong.

With the economy healthy, the recent trend toward higher mortgage rates hasn't dampened home buying, new data shows. Americans bought existing homes in January at the fastest pace since 2007. That has set off bidding wars that have pushed up prices as the supply of available homes has dwindled to record lows.

Home sales rose 3.3 percent in January from December to a seasonally-adjusted annual rate of 5.69 million, the National Association of Realtors reported Wednesday.

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 was unchanged this week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.

Rates on adjustable five-year loans fell to 3.16 percent from 3.18 percent last week. The fee held at 0.4 point.