Created: 02/20/2014 11:25 AM KSTP.com By: Scott Theisen
Average U.S. rates on fixed mortgages rose this week but remained near historically low levels.
Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan increased to 4.33 percent from 4.28 percent last week. The average for the 15-year mortgage edged up to 3.35 percent from 3.33 percent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases. Deeming the economy to be gaining strength, the Fed proceeded last month with planned reductions of its bond purchases, which have helped keep long-term interest rates low.
The housing market is expected to deliver another year of solid gains, helped by an improving economy. Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast that both will likely rise by about 5 percent, down from double-digit gains in 2013.
Government data released Wednesday showed that U.S. home construction fell in January for a second straight month, but the weakness in both months reflected severe winter weather in many parts of the country.
In a similar vein, U.S. homebuilders' confidence in the housing market declined sharply this month as the rough weather battering much of the nation keeps many would-be buyers at home, according to the National Association of Home Builders/Wells Fargo builder sentiment index issued Tuesday.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and 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 a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also remained at 0.7 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.57 percent from 2.55 percent. The average fee declined to 0.3 point from 0.4 point.
The average rate on a five-year adjustable mortgage increased to 3.08 percent from 3.05 percent. The fee held at 0.5 point.
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