Long-term interest rates declined this week, with Freddie Mac saying lenders were offering conventional 30-year mortgages at an average of 3.78 percent, down from 3.86 percent a week ago.

The average for 15-year fixed home loans slipped from 3.1 percent to 3.06 percent, Freddie Mac said in its weekly report, released Thursday. The initial rate on loans fixed for five years before becoming variable fell from 3.01 percent to 2.97 percent.

Lower rates are good news for the low-risk borrowers Freddie focuses on as spring usually brings a season of increased home sales. A year ago at this time, Freddie put the average rate for a 30-year fixed home loan at 4.32 percent.

Nationally, signals have been mixed, with housing starts below market expectations but housing permits up 3 percent in February, Freddie Mac's deputy chief economist, Len Kiefer, said as the report was released.

The yield on the 10-year Treasury bond, generally a proxy for fixed mortgage rates, closed below 2 percent on Wednesday for the first time since Feb. 25.

The decline was in reaction to remarks by Federal Reserve Chairman Janet Yellen, who said the Fed is in no rush to raise interest rates for the first time since 2006, even though a change in its policy language opened the door for this to happen eventually.

Freddie Mac asks lenders early each week about the terms they are offering to solid borrowers seeking mortgages of up to $417,000 that conform to the guidelines of Freddie Mac and Fannie Mae, the nation's major mortgage-financing companies.

The borrowers would have paid a little more than half of 1 percent of the loan balance in upfront lender fees and discount points to obtain the rates. Payments for such services as appraisals and title insurance are not included.

The survey provides a consistent gauge of mortgage trends, but actual rates adjust constantly and are influenced by many factors.

In addition to borrowers' credit histories and debt loads, the factors include whether the borrowers opt for zero-cost loans at higher rates or pay extra to lenders initially to lower the rates.


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