U.S. rate on 30-year mortgage rises to 3.56 pct.
WASHINGTON (AP) - The average U.S. rate on the 30-year fixed mortgage rose this week but remained near historic lows. Low mortgage rates have helped support the slowly recovering housing market.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.56 percent from 3.53 percent last week. That's still near the 3.31 percent reached in November, which was the lowest on record dating to 1971.
The average rate on the 15-year fixed mortgage stayed at 2.77 percent for a third straight week. The record low is 2.63 percent.
The cheap mortgages that are encouraging more people to buy or refinance could also help sustain the economy's recovery this year. Increased sales are helping lift home prices, which tend to make consumers feel wealthier and more likely to spend. And when homeowners refinance, it typically leads to lower loan payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Sales of previously occupied homes in the U.S. rose in January to the second-highest level in three years, the National Association of Realtors reported Thursday.
Analysts say the pace of purchases would be higher still if more homes were available. The supply of homes for sale dropped to nearly an eight-year low in January. The limited supply has boosted demand for construction, which has made builders more confident.
Still, the housing market has a long way to go to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money for larger down payment requirements.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year loans was unchanged at 0.8 point. The fee for 15-year loans also remained at 0.8 point.
The average rate on a one-year adjustable-rate mortgage increased to 2.65 percent from 2.61 percent last week. The fee for one-year adjustable-rate loans rose to 0.4 point from 0.3.
The average rate on a five-year adjustable-rate mortgage was steady at 2.64 percent. The fee slipped to 0.5 point from 0.6.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.56 percent from 3.53 percent last week. That's still near the 3.31 percent reached in November, which was the lowest on record dating to 1971.
The average rate on the 15-year fixed mortgage stayed at 2.77 percent for a third straight week. The record low is 2.63 percent.
The cheap mortgages that are encouraging more people to buy or refinance could also help sustain the economy's recovery this year. Increased sales are helping lift home prices, which tend to make consumers feel wealthier and more likely to spend. And when homeowners refinance, it typically leads to lower loan payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Sales of previously occupied homes in the U.S. rose in January to the second-highest level in three years, the National Association of Realtors reported Thursday.
Analysts say the pace of purchases would be higher still if more homes were available. The supply of homes for sale dropped to nearly an eight-year low in January. The limited supply has boosted demand for construction, which has made builders more confident.
Still, the housing market has a long way to go to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money for larger down payment requirements.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year loans was unchanged at 0.8 point. The fee for 15-year loans also remained at 0.8 point.
The average rate on a one-year adjustable-rate mortgage increased to 2.65 percent from 2.61 percent last week. The fee for one-year adjustable-rate loans rose to 0.4 point from 0.3.
The average rate on a five-year adjustable-rate mortgage was steady at 2.64 percent. The fee slipped to 0.5 point from 0.6.
Keep in mind these are not today's rates. Â These quoted rates are based on loans locked 60 to 90 days ago or longer with some banks. Â (Bank of America, Wells Fargo).Â
Love how the news doesn't understand these reports and the actual data in them. Â Truly does a disservice to the consumer because they don't realize rates have gone up a bit this year.Â
@CB Agreed. This seems very outdated. I usually look at bankrate for the latest rates. Today they posted the weekly average rate is now closer to 3.8.
I don't suppose anyone recalls the nature of our Great Recession. One MAJOR factor was the housing bust. And what  was a factor in that bust? Cheap, cheap money along with devil-may-care underwriting standards. So yes, in the short term, housing prices will rise but should interest rates rise quickly, we will be back to 2008 again. And since some home loans were made in 2001-2008, we can simply blame Bush!
@Getov Mylon What do interest rates have to do with 2008? The issue with 2008 is that people were being allowed to buy houses they couldn't afford at super inflated prices. My parents bought a house for $330,000 in 2003. 3 years later, a neighbor with the same model sold their house for $550,000. If houses continue to rise at sustainable levels (not like they were) and banks follow reasonable debt to income ratio models, things will be ok in housing unless people start getting laid off for issues in other areas of the economy.
@Paddy @Getov Mylon If banks follow debt to income ratios, they will be accused of being "red-liners" or racist.  If they make those loans anyway, they are "predatory lenders."Win-win!
@Getov Mylon @Paddy It's entirely possible. The government is definitely still making it a priority to keep things low right now though. I'd imagine it will take at least a couple years for them to loosen things up on that front given that unemployment isn't dropping very fast. That is unless inflation starts going crazy in the meantime.
@Paddy"The question now is what will set off the next one."
My money is on exploding (imploding?) interest rates.
@Getov Mylon @Paddy Who cares? Most banks are already following tougher standards. I just bought a house 8 months ago and they took a very close look at my finances. My brother bought a house less than a year before me and also went through the same tough standards. They gave him a very cut and dry limit about what they'd lend him. Most banks have been following these standards more closely for a few years now. They've been doing just fine.
Like I said, if things go down in housing again, it's likely due to people losing jobs as part of a breakdown in another part of the economy. Either from some other bubble, inflation, issues in the global economy, or something completely out of the blue many haven't even thought of. Throughout history, we've average at least one recession a decade. The question now is what will set off the next one.