Mortgage rates were little changed, keeping borrowing costs close to record lows after home prices increased in more U.S. cities.
The average rate for a 30-year fixed mortgage climbed to 3.4 percent in the week ended today from 3.39 percent, Freddie Mac said in a statement. The average 15-year rate fell to 2.69 percent from 2.7 percent, according to the McLean, Virginia-based mortgage-finance company.
Low interest rates are making real estate more affordable, while rising demand is bolstering values. Single-family home prices climbed in the third quarter from a year earlier in 120 of 149 U.S. metropolitan areas measured, the National Association of Realtors said in a report yesterday. In the second quarter, 110 areas had gains.
“There is absolutely a direct relationship between falling interest rates and rising prices,” Keith Gumbinger, vice president of HSH.com, a Pompton Plains, New Jersey-based mortgage-information website, said yesterday in a telephone interview. “More borrowers can come out and participate in markets that would have been considered too expensive for them.”
The 30-year average reached an all-time low of 3.36 percent last month, while the 15-year hit a record of 2.66 percent, according to Freddie Mac.