Home construction

Chris Thibodeau, a biotech executive, waits in line to buy into a new Huntington Beach subdivision earlier this year. (Mark Boster / Los Angeles Times)

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A brighter economic picture sent mortgage interest rates higher this week, with housing finance giant Freddie reporting that a 30-year fixed-rate home loan averaged 4.16%, up from 4.1% last week.

The interest rate for a 15-year fixed mortgage, popular with people refinancing their homes, averaged 3.27%, up from 3.2%, Freddie Mac said Thursday in its weekly survey of the terms lenders are offering solid borrowers.

The more the economic news improves, the likelier it becomes that the Federal Reserve will begin scaling back its enormous purchases of Treasury securities and mortgage bonds, a program designed to keep long-term interest rates low.

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Freddie Mac’s chief economist, Frank Nothaft, noted that manufacturing expanded for the fifth month in a row in October, while the non-manufacturing sector grew for a second consecutive month, defying expectations that it would decline.

The news was mixed Thursday. Initial claims for unemployment dropped for the fourth straight week and economic growth strengthened, the government said. But a Commerce Department report raised a red flag by saying that consumer and business spending, two critical drivers of the economy, had slowed in September.

Freddie Mac polls lenders each Monday through Wednesday about the terms of the loans they are offering to mortgage borrowers with strong credit ratings and 20% down payments or home equity. Borrowers would have paid about 0.75% of the loan amount in lender fees and points to obtain the rates, Freddie said.

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