Mortgage rates tick up to 2.9%, remain at historic lows

U.S. average rates on long-term mortgages increased slightly, according to Freddie Mac. PHOTO CREDIT: John Minchillo

SILVER SPRING, Md. — U.S. average rates on long-term mortgages rose slightly this week but remain at historically low levels.

Mortgage buyer Freddie Mac reported today that the average rate on the 30-year home loan edged up to 2.90% from 2.87% last week. One year ago, the rate averaged 3.64%.

The average rate on the 15-year fixed-rate mortgage also rose, to 2.40% from 2.35% last week.

Low interest rates have made demand for housing even stronger, but supply remains scarce. The National Association of Realtors reported Wednesday that the number of existing homes for sale in August was 1.49 million units, a decline of 18.6% from this time last year.

Although sales of existing homes rose 2.4% in August to its highest level since 2006, the lack of inventory is pushing prices higher, causing some concern. NAR said the median price for an existing single-family home reached $315,000 in August, up 11.7% from last year. Last month was the first time the median price for a home breached $300,000.

Economists worry that the price increases could take buyers out of the market, especially those seeking to own a home for the first time.

A lack of available homes has been a problem for years, long before the virus outbreak spooked many homeowners into staying put. Further, the government reported Thursday that the number of people seeking U.S. unemployment aid rose slightly last week to 870,000, a historically high figure that has likely kept many homeowners from exploring upgrades.