U.S. mortgage rates rose, increasing borrowing costs as home values extend a rebound from their worst crash since the 1930s.
The average rate for a 30-year fixed mortgage climbed to 3.41 percent in the week ended today from 3.37 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15- year rate rose to 2.72 percent, from 2.66 percent.
Mortgage rates fell to record lows this month, spurring demand for real estate and helping support prices as buyers compete for a shrinking supply of listings. Home values jumped 1.3 percent in the third quarter from the previous three months, the biggest gain since 2006, Zillow Inc., a Seattle-based property-data company, said this week.
“Now that people have confidence that a bottom was reached and is in the rear-view mirror, now there’s a willingness to take advantage of those historically low interest rates,” Russell Price, a Detroit-based senior economist for Ameriprise Financial Inc. (AMP), said in a telephone interview yesterday. “Now they’re much more effective in facilitating an ongoing recovery.”
Contracts to buy previously owned homes climbed 0.3 percent in September from the previous month and almost 15 percent from a year earlier, the National Association of Realtors said today.
Purchases of new homes jumped 5.7 percent in September to a 389,000 annual pace, the most since April 2010, figures from the Commerce Department showed yesterday.
The 30-year average reached 3.36 percent earlier this month, an all-time low, according to Freddie Mac.
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