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NEW YORK, April 4 (Reuters) - Interest rates on U.S. 30-year fixed-rate mortgages edged up from their lowest in over 14 months as bond yields have risen this week on encouraging economic data and optimism on a trade deal between China and the United States, Freddie Mac said on Thursday.
Thirty-year mortgage rates averaged 4.08% in the week ended April, up from the prior week’s 4.06%, which was the lowest level since Jan. 18, 2018, the mortgage finance agency said.
U.S. Treasury yields this week climbed to 1-1/2-week highs as traders pared bond holdings in response to encouraging global economic data and hopes that Washington and Beijing are moving closer to a trade deal.
Declining home borrowing costs have lifted mortgage activity with overall demand for home loans hitting its strongest weekly level since October 2016, according to data from the Mortgage Bankers Association released on Wednesday.
“The benefits of the decline in mortgage rates that we’ve seen this year will continue to unfold over the next few months due to the lag from changes in mortgage rates to market sentiment and ultimately home sales,” Freddie Mac’s chief economist Sam Khater said in a statement.
While 30-year mortgage rates ticked higher, other home loan rates Freddie Mac tracks decreased further this week.
The average interest rate on 15-year mortgages dipped 1 basis point to 3.56% in the latest week, which was the lowest in 14 months, Freddie Mac said.
Loan rates on five-year adjustable mortgages fell to 3.66%, the lowest since January 2018, from 3.75% the week before.
Reporting by Richard Leong; editing by Chizu Nomiyama, G Crosse