30-year fixed mortgage rate rises for second week in a row
The average rate on a 30-year fixed mortgage rose for the second week in a row, buoyed by higher bond yields.
Freddie Mac said Thursday that the average rate rose to 4.80 percent this week from 4.74 percent last week. The average rate on the 15-year loan, a popular refinance option, inched up to 4.09 percent from 4.05 percent.
The average rate on a five-year, adjustable-rate mortgage rose to 3.70 percent from 3.69 percent, and the average rate on one-year adjustable-rate loans edged up to 3.26 percent from 3.25 percent.
The Federal Reserve on Wednesday said it is pressing ahead with its plan to buy $600 billion in Treasurys to shore up the economy and keep borrowing costs low. Mortgage rates tend to track the yield on the 10-year Treasury note.
The Mortgage Bankers Association's index of mortgage applications fell 13 percent last week, to the lowest level since November 2008. Refinancing applications dropped 15 percent, while the purchasing gauge declined 9 percent.
Purchases of existing homes rose 12 percent in December, to a 5.28 million annual rate, as borrowers rushed to lock in low rates, according to data from the National Association of Realtors. New-home sales climbed 18 percent in the month to a 329 ,000 annual pace, the biggest jump since 1992, the Commerce Department said Wednesday.
The S&P/Case-Shiller home price index, released Tuesday, showed that home values in 20 cities dropped 1.6 percent in November compared with a year earlier.
Home prices are "bouncing around" a bottom and could climb in the first half of the year as afforadable properties draw buyers back to the market, said Karl Case, an economist who co- founded the index.
Freddie Mac's rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year and 15-year loan in Freddie Mac's survey was 0.7 point. The average fee for the five-year ARM was 0.7 point, and the fee for the one-year ARM was 0.6 point.
- From news services