US average long-term mortgage rates fall; 30-year at 2.98%

This is a home for sale in Mount Lebanon, Pa., on Tuesday, Sept. 21, 2021. Average long-term mortgage rates in the U.S. fell this week, as the key 30-year rate again retreated below 3%. Mortgage buyer Freddie Mac reports that the average rate on the benchmark home loan declined to 2.98% from 3.09% last week, Wednesday, Nov. 10, 2021. (AP Photo/Gene J. Puskar)

WASHINGTON (AP) — Average long-term mortgage rates in the U.S. fell this week, as the key 30-year rate again retreated below the 3% mark.

Mortgage buyer Freddie Mac reported Wednesday that the average rate on the benchmark home loan declined to 2.98% from 3.09% last week. Last year at this time the rate stood at 2.84%.

The rate for a 15-year loan, a popular option for homeowners refinancing their mortgages, fell to 2.27% from 2.35% last week.

Rates remain historically low, though limited inventory and rising prices are leaving many potential homebuyers on the sidelines.

Freddie Mac economists attributed the latest decline in mortgage rates to a recent rally in prices in the Treasury bond market, which saw yields on key Treasurys falling to their lowest level since July. Long-term bond yields, which can influence rates on mortgages and other consumer loans, generally fall when bond prices rise.

Last week the Federal Reserve announced that it would keep its main borrowing rate near zero but begin dialing back the extraordinary stimulus it has provided since the coronavirus pandemic erupted last year. The Fed said it will start reducing its $120 billion in monthly bond purchases in the coming weeks, by $15 billion a month, citing an improving economy and escalating concern that an inflation spike now seems likely to persist.

The central bank’s action comes as higher prices for just about everything — food, rent, heating oil, autos and other necessities — have burdened households. Fueling the spike in prices has been robust consumer demand, which has run into persistent supply shortages from COVID-related factory shutdowns in China, Vietnam and other overseas manufacturers.

The worsening surge of inflation for bedrock necessities is setting many Americans up for a financially difficult Thanksgiving and holiday shopping season. The government reported Wednesday that prices for U.S. consumers jumped 6.2% in October compared with a year earlier — leaving families facing the highest inflation rate since 1990. From September to October, prices jumped 0.9%.

Inflation is eroding the strong gains in wages and salaries that have flowed to U.S. workers in recent months, posing a political threat to the Biden administration and congressional Democrats and intensifying pressure on the Fed as it considers how fast to withdraw its efforts to boost the economy.