SILVER SPRING, Md. -- The average interest rate for long-term mortgages in the U.S. remained flat this week, after the Federal Reserve suggested that it would start tightening credit by raising its benchmark rate.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year, fixed rate home loan ticked up slightly to 3.11% from last week's 3.10%. One a year ago the rate was 2.71%.
The red-hot U.S. housing market has been juiced by low interest rates and pent-up demand from consumers. However, a limited supply of available homes and a big jump in prices has left many would-be buyers on the sidelines.
Earlier this week, Fed Chairman Jerome Powell signaled a sharp turn toward tightening credit more quickly than the Fed has previously indicated. Powell said Tuesday that it would be "appropriate" for the central bank to consider accelerating the reduction of its bond purchases at its next meeting in mid-December. That would pave the way to the Fed raising its benchmark interest rate as early as spring.
Many economists expect U.S. interest rates to rise in coming months as the Fed retreats from the easy money policies it adopted after the coronavirus outbreak ravaged the U.S. economy in the spring of 2020.
Freddie Mac -- the Federal Home Loan Mortgage Corp. -- reported that the 15-year, fixed rate mortgage rates declined marginally to 2.39% from 2.42% from last week. That rate was 2.26% a year ago.