Mortgage rates in the U.S. climbed close to a two-year high, increasing borrowing costs as the housing recovery cools.
The average rate for a 30-year fixed mortgage increased to 4.57 percent this week from 4.51 percent, Freddie Mac said in a statement today. The average 15-year rate rose to 3.59 percent from 3.54 percent, according to the McLean, Virginia-based company.
A jump in the 30-year rate from a near-record low of 3.35 percent in May has cut into affordability and pushed some would-be homebuyers out of the market. Applications for home-purchase loans plunged 15 percent in the past four months, according to data from the Mortgage Bankers Association released yesterday. Contracts to buy existing houses and new-home sales both declined in July.
“Higher rates do push buyers to the sidelines,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data firm. “Some borrowers will step out, some borrowers will change their choices and look for less-costly homes.”
In a survey released yesterday by Redfin, a Seattle-based brokerage, 63 percent of potential buyers said higher mortgage rates are making it harder for them to afford a home. While low inventory was the most common concern for buyers, rising borrowing costs was the second-biggest, according to the poll of 1,722 people shopping for homes, conducted from Aug. 23-26.