U.S. 30-Year Mortgage Rates Rise to Highest Since August

U.S. mortgage rates for 30-year fixed loans rose, increasing long-term borrowing costs after construction of single-family homes climbed to a four-year high.

The average rate for a 30-year fixed mortgage was 3.56 percent in the week ended today, up from 3.53 percent and the highest level since Aug. 30, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate held at 2.77 percent.

Interest rates at near-record lows and a shrinking supply of existing homes on the market are supporting demand for new houses. Builders broke ground in January on the most U.S. single-family homes since July 2008 and permits for future construction climbed, figures from the Commerce Department showed yesterday.

“Mortgage rates are still very, very low,” Celia Chen, a housing economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said yesterday in a telephone interview. “They’re likely to stay low at least another year.”

The average 30-year mortgage rate dropped to a record 3.31 percent in November, according to Freddie Mac. (FMCC) The 15-year rate fell to 2.63 percent, also the lowest on record.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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Feb. 20 (Bloomberg) -- David Stevens, chief executive officer of the Mortgage Bankers Association, talks about the outlook for the U.S. housing market and economy. Stevens speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

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Feb. 20 (Bloomberg) -- Douglas Yearley, chief executive officer of Toll Brothers Inc., talks about the company's fourth-quarter earnings, outlook and regional housing markets. The largest U.S. luxury-home builder reported net income that trailed analyst estimates and projected narrower margins. Yearley speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)