U.S. mortgage rates declined, pushing borrowing costs back toward record lows as homebuilders step up construction to meet rising demand.
The average rate for a 30-year fixed mortgage fell to 3.37 percent in the week ended today from 3.39 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate slid to 2.66 percent, a record, from 2.7 percent.
The 30-year rate reached 3.36 percent earlier this month, an all-time low, according to Freddie Mac. Low borrowing costs and improving employment are bolstering a real estate recovery. Housing starts jumped 15 percent in September to the fastest pace since since July 2008, Commerce Department figures showed yesterday. The 872,000 annual rate exceeded all forecasts in a Bloomberg survey of economists.
“We have turned an important corner,” Millan Mulraine, a senior U.S. strategist at TD Securities Inc. in New York, said in a telephone interview yesterday. “The housing sector has not only stabilized, but it is on its way to a more sustainable recovery.”
The jobless rate last month dropped to a three-year low of 7.8 percent, the Labor Department said Oct. 5.
Home-loan applications declined 4.2 percent in the week ended Oct. 12, according to the Mortgage Bankers Association. An index measuring refinancing dropped 5.3 percent, while the purchase gauge gained 0.9 percent to the highest level since June, the Washington-based group said yesterday.