OfflineU.S. mortgage rates for 30-year loans increased for the first time in six weeks as the two-year-old housing recovery showed signs of slowing.
The average rate for a 30-year fixed mortgage was 4.28 percent this week, up from 4.23 percent, Freddie Mac said today. The average 15-year rate held at 3.33 percent, the McLean, Virginia-based mortgage-finance company said.
While job growth and tight inventories have bolstered the housing recovery, prices have climbed faster than incomes, putting real estate out of reach for some buyers. An affordability index by the National Association of Realtors -- a gauge of median prices, family incomes and mortgage rates -- fell last year from a record high in 2012. In the fourth quarter, single-family home prices rose from a year earlier in 73 percent of U.S. cities, down from 88 percent in the previous three months, the Realtors group said this week.
“As demand pulls back, I expect a reduction in price gains,” Lindsey Piegza, the Chicago-based chief economist for Sterne, Agee & Leech Inc., said in an interview yesterday. “We've simply reverted to the underlying modest trend, which is a best-case scenario. It allows the housing market to slowly recover and minimizes the chance of a housing bubble.”
A jump in mortgage rates from near-record lows in May has contributed to cooling demand. While the 30-year rate has retreated from a two-year high of 4.58 percent in August, borrowing costs are poised to increase as the Federal Reserve trims bond purchases that had pushed down rates.
Janet Yellen, who took over as chairman of the central bank this month, pledged this week to maintain her predecessor Ben S. Bernanke’s policies by scaling back the stimulus in “measured steps.” pGopal
for 30-year U.S. loans climbed for a second week, cutting into affordability as the housing recovery shows signs of cooling.
The average rate for a 30-year fixed mortgage was 4.33 percent this week, up from 4.28 percent, Freddie Mac said today. The average 15-year rate rose to 3.35 percent from 3.33 percent, the McLean, Virginia-based mortgage-finance company said.
While the job market is improving, higher prices and borrowing costs are making it more expensive to own a home. Monthly payments on a median-priced three-bedroom home -- including mortgage, insurance, taxes and maintenance -- rose an average of 21 percent in the fourth quarter from a year earlier, according to an analysis of 325 U.S. counties by RealtyTrac released today. Mortgage rates jumped to a two-year high in August from near-record lows in May, Freddie Mac data show.
“The cost of financed homeownership is becoming dangerously disconnected with still-stagnant median incomes,” Daren Blomquist, vice president at Irvine, California-based RealtyTrac, said in the report.
Starts for single-family houses slumped in January, in part because of unusually harsh weather in much of the U.S. Builders began work on 573,000 homes at an annualized rate last month, down 15.9 percent from December and the fewest since August 2012, Commerce Department data issued yesterday show.
Confidence among home-builders dropped in February by the most on record as snowstorms on the East Coast limited prospective buyer traffic, according to the National Association of Home Builders/Wells Fargo sentiment gauge released this week. pgopal