U.S. mortgage rates rose from record lows, increasing borrowing costs as an improving job market bolsters a recovery in housing.
The average rate for a 30-year mortgage climbed to 3.39 percent in the week ended today from 3.36 percent, McLean, Virginia-based Freddie Mac said in a statement. Last week’s rate was the lowest in the mortgage-finance company’s data, which go back to 1971. The average 15-year rate increased to 2.7 percent from 2.69 percent.
Low interest rates and job growth have helped boost demand for homes as the housing market recovers from the worst crash since the Great Depression. The unemployment rate fell in September to 7.8 percent, the lowest since January 2009, according to the Bureau of Labor Statistics’ survey of households. A separate survey of employers showed the economy added 114,000 workers.
“A positive job report is always good for the housing market,” Celia Chen, a housing economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said yesterday. “We do expect job growth to continue -- not strongly, but it will continue. That will be enough to keep housing on an upward trajectory.”
Home prices rose 4.6 percent in August from a year earlier, the biggest increase since July 2006, according to CoreLogic Inc., a Santa Ana, California-based mortgage data firm.
Mortgage applications in the U.S. decreased last week from a three-year high as fewer borrowers refinanced loans, according to a Mortgage Bankers Association index released yesterday. The Washington-based group’s refinancing measure fell 2 percent, while purchase applications climbed 2.4 percent.