Mortgage rates rise from last week's record lows

Mortgage rates in the US rose to an average 3.39 percent last week, up from 3.36 percent. Last week's 30-year mortgage rates were the lowest since long-term mortgages began in the 1950s.

By Marcy Gordon,?AP Business writer / October 11, 2012

This September 2012 file photo shows a home for sale in Miami Lakes, Fla. Mortgage buyer Freddie Mac said Thursday, Oct. 11, 2012, that the rate on the 30-year loan increased to 3.39 percent from 3.36 percent. The previous week's rate was the lowest since long-term mortgages began in the 1950s.

Alan Diaz/AP

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Average U.S.?rates?on fixed?mortgages?ticked up from record lows last week. Cheaper?mortgages?are fueling a modest housing recovery that could help the broader economy.

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Mortgage?buyer Freddie Mac said Thursday that the?rate?on the 30-year loan increased to 3.39 percent from 3.36 percent. The previous week's?rate?was the lowest since long-term?mortgages?began in the 1950s.

The average on the 15-year fixed?mortgage?edged up to 2.70 percent, from last week's record low of 2.69 percent.

The average?rate?on the 30-year fixed?mortgage?has been below 4 percent all year. And?rates?have fallen even further since the Federal Reserve started buying?mortgage?bonds in September to encourage more borrowing and spending.

The Fed said it will continue buying bonds until the job market shows substantial improvement. When home prices rise, people tend to feel wealthier and spend more freely. Consumer spending drives nearly 70 percent of economic activity.

Stronger housing markets helped boost economic growth at the end of the summer in nearly every region of the United States, according to a Fed survey released Wednesday. The survey follows other reports that show marked improvement in the housing market five years after the bubble burst.

Home sales are up from last year and home prices are rising more consistently in most areas. Builders are more confident and starting more homes. Lower?rates?have also persuaded more people to refinance. That typically leads to lower monthly?mortgagepayments and more spending.

Still, the housing market has a long way to 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 to meet larger down payment requirements.

To calculate average?rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 0.7 point, up from 0.6 point last week. The fee for 15-year loans rose to 0.6 point from 0.5.

The average?rate?on one-year adjustable-rate?mortgages?increased to 2.59 percent from 2.57 percent. The fee for one-year adjustable?rate?loans was unchanged at 0.4 point.

The average?rate?on five-year adjustable-rate?mortgages?edged up to 2.73 percent from 2.72 percent. The fee held steady at 0.6 point.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/Efr9VHCS-W0/Mortgage-rates-rise-from-last-week-s-record-lows

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