Mortgage rates rise slightly but remain near record lows
Mortgage rates rose slightly but remained near record lows this week after lenders reported the first increase in six weeks in the number of loan applications by would-be home buyers. But for the housing market, doubt remains about how many people want to buy residential property.
Mortgage giant Freddie Mac said lenders this week were offering an average rate of 4.75% to rock-solid borrowers for a 30-year fixed mortgage, up from 4.72% last week and from the record low of 4.71% reached in December.
For 15-year fixed-rate loans, the average was 4.2%, up from 4.17%.
To get the rates cited by the lenders surveyed, borrowers had to pay on average 0.7% of their loan amount in upfront fees.
Despite the unusually low loan rates in recent weeks, applications for home-purchase mortgages shriveled April 30, the deadline for federal home-buyer tax credits. The decline prompted a debate about the sustainability of the housing recovery.
This week, the Mortgage Bankers Assn. said purchase applications rose 7.3% last week on a seasonally adjusted basis. But purchase applications remained 38% below their 2010 peak at the end of April.
Michael Fratantoni, the banking group’s vice president of research, refrained from drawing a conclusion about the latest data.
“While it is clear that purchase applications in May dropped sharply as a result of the tax-credit-induced increase in applications in April,” he said, “it is unclear whether we are seeing the beginnings of a rebound now.”
