US long-term mortgage rates rise; 30-year average at 2.97%

A new home is for sale in Madison, Ga., Thursday, Feb. 18, 2021. U.S. long-term mortgage rates rose this week but still remain near historic lows as the pandemic-hobbled economy strains toward recovery with more Americans getting vaccinated against the coronavirus. (AP Photo/John Bazemore)

WASHINGTON (AP) — U.S. long-term mortgage rates rose this week but remain near historic lows as the pandemic-hobbled economy strains toward recovery with more Americans getting vaccinated against the coronavirus.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year fixed-rate home loan increased to 2.97% from 2.81% last week. By contrast, the benchmark rate stood at 3.45% a year ago.

The average rate on 15-year fixed-rate loans, popular among those seeking to refinance their mortgages, rose to 2.34% from 2.21% last week.

While economists expect modest increases in home-loan rates this year, they likely will remain low while the Federal Reserve keeps interest rates near zero until the economy recovers.

The record-low lending rates have helped push buyers into the housing market. The government reported Wednesday that demand for new homes surged 4.3% in January, confirming that the housing market remains one of the stronger sectors of the U.S. economy. But the lack of supply of homes, which was pushing up prices even before the pandemic struck last March, has left many prospective buyers empty-handed.

The number of Americans applying for unemployment aid fell sharply last week in a sign that layoffs may have eased, though applications for benefits remain at a historically high level. Jobless claims declined by 111,000 from the previous week to a seasonally adjusted 730,000, the Labor Department reported Thursday. The latest figures coincide with a weakened job market that has made scant progress in the past three months.