U.S. mortgage rates rose, increasing borrowing costs from a four-month low as an expanding recovery in home prices reduces affordability for some would-be buyers.
The average rate for a 30-year fixed mortgage climbed to 4.16 percent the week ended today from 4.1 percent, Freddie Mac said in a statement today. The average 15-year rate rose to 3.27 percent from 3.2 percent.
A jump in rates since May and home-price gains that are spreading to more areas of the U.S. have caused some buyers to hold back. Demand should pick up if rates stay close to current levels, which are not far from historic lows, said Gennadiy Goldberg, U.S. strategist for TD Securities in New York.
“There’s enough momentum in the housing market for the recovery to keep going,” Goldberg said yesterday in a telephone interview. “Slightly higher rates shouldn’t be enough to derail the housing recovery.”
Prices for single-family homes climbed in 88 percent of U.S. cities in the third quarter as buyers competed for limited inventories, data from the National Association of Realtors show. The nationwide median price for a previously owned house rose 12.5 percent from a year earlier to $207,300, the group reported yesterday.
Contracts (USPHTMOM) to buy existing residences dropped the most in more than three years in September, the Realtors association said last week.
Applications for home-purchase loans slipped last week to the lowest level since December, data from the Mortgage Bankers Association showed yesterday.
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