Mortgage rates inch higher this week after Federal Reserve Chair Janet Yellen announced that U.S. interest rates may rise later this year. Currently, the average 30-year fixed rate loan stands at 3.46% according to Freddie Mac, up from last week’s average of 3.43%.
Yellen cited the strong labor market and promising economic outlook and inflation as to potentially raise rates, but she declined to offer any timeline. Policymakers are next scheduled to meet at the end of September.
While the Fed’s rate doesn’t directly affect the home loan market, rates tend to rise and fall in tandem.
To put these low rates into perspective, last year’s average home loan was 3.89%, and it hit its all-time low in November 2012 at 3.31%. Most economists and loan officers consider any rate under 6% as low.