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U.S. Mortgage Rates Increase With 30-Year Fixed at 4.57%

Mortgage rates in the U.S. climbed close to a two-year high, increasing borrowing costs as the housing recovery cools.

The average rate for a 30-year fixed mortgage increased to 4.57 percent this week from 4.51 percent, Freddie Mac said in a statement today. The average 15-year rate rose to 3.59 percent from 3.54 percent, according to the McLean, Virginia-based company.

A jump in the 30-year rate from a near-record low of 3.35 percent in May has cut into affordability and pushed some would-be homebuyers out of the market. Applications for home-purchase loans plunged 15 percent in the past four months, according to data from the Mortgage Bankers Association released yesterday. Contracts (USPHTMOM) to buy existing houses and new-home sales both declined in July.

“Higher rates do push buyers to the sidelines,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data firm. “Some borrowers will step out, some borrowers will change their choices and look for less-costly homes.”

In a survey released yesterday by Redfin, a Seattle-based brokerage, 63 percent of potential buyers said higher mortgage rates are making it harder for them to afford a home. While low inventory was the most common concern for buyers, rising borrowing costs was the second-biggest, according to the poll of 1,722 people shopping for homes, conducted from Aug. 23-26.

To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net

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

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