Mortgage rates in the U.S. rose from a record low, breaking a seven-week streak of declines that fueled demand for home loans.
The average rate for a 30-year fixed mortgage increased to 3.71 percent in the week ended today from 3.67 percent, the lowest level in records dating to 1971, according to a statement from McLean, Virginia-based Freddie Mac. The average 15-year rate climbed to 2.98 percent from 2.94 percent.
Low borrowing costs are pushing homeowners to reduce their monthly payments while also helping to stabilize the housing market. Mortgage applications surged 18 percent in the week ended June 8, the Washington-based Mortgage Bankers Association said yesterday. An index measuring refinancing increased 19 percent to the highest level since 2009, while the purchase gauge climbed 13 percent.
“Mortgage rates are just very low right now, and that’s causing some strengthening in demand,” said Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania. “The refis have been rising consistently for a while now. On the purchase side, I guess people are starting to feel more confident in the housing market.”
Home prices advanced for a second straight month in April, rising 1.1 percent from a year earlier, CoreLogic said on June 5. It was the first consecutive increase since June 2010, according to the Santa Ana, California-based data provider.