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Rate on 30-year mortgage rises to 3.91 percent
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WASHINGTON (AP) — For the second straight week, average long-term U.S. mortgage rates inched up this week as financial markets awaited the Federal Reserve’s crucial decision on interest rates.

Capping months of feverish speculation, Fed policymakers announced Thursday they’ve decided to keep interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. But at a news conference, Fed Chair Janet Yellen said a rate hike was still likely this year. A majority of Fed officials on the committee that sets the federal funds rate — which controls the interest that banks charge each other — still foresee higher rates before next year. The Fed will meet next in October and then December.

A rate hike by the Fed could bring higher rates for home loans. The Fed has kept its key short-term rate at a record low near zero since the financial crisis struck seven years ago.

The Fed announcement came Thursday afternoon, some time after mortgage giant Freddie Mac issued the latest data on weekly mortgage rates. Freddie reported that the average rate on a 30-year fixed-rate mortgage edged up to 3.91 percent from 3.90 percent a week earlier. The rate on 15-year fixed-rate mortgages rose to 3.11 percent from 3.10 percent.

With the job market now considered essentially recovered from the Great Recession, many economists say it’s time to start edging toward normal rates. Others argue that many other factors — notably a sharply slowing China, the tumult in markets and persistently less-than-optimal inflation — raise serious concerns. They say the Fed should wait, until later this year or even 2016.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan declined to 0.6 point from 0.7 point.

The average rate on five-year adjustable-rate mortgages rose to 2.92 percent from 2.91 percent; the fee held steady at 0.5 point. The average rate on one-year ARMs fell to 2.56 percent from 2.63 percent; the fee slipped to 0.2 point from 0.3 point.