U.S. mortgage rates rose for a third week as 10-year Treasury yields, a benchmark for consumer debt, jumped amid signs the economy is improving.
The average rate for a 30-year fixed mortgage increased to 3.62 percent in the week ended today from 3.59 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15- year rate was 2.88 percent, up from 2.84 percent.
Yields for 10-year U.S. Treasuries touched a three-month high today, extending gains from a record low in July as improved economic data damp demand for the safety of government debt. An increase in borrowing costs may spur homebuyers to enter the market on the expectation mortgage rates will continue to rise, said David Goldberg, an analyst with UBS AG.
“Rising mortgage rates, initially, in a growing economy, would help to create demand,” Goldberg, based in New York, said in a telephone interview yesterday.
The average rate for a 30-year loan reached a record-low 3.49 percent in the week ended July 26.
The housing market is showing signs of stabilization after the worst slump since the Great Depression. Confidence among U.S. homebuilders climbed in August to the highest level in more than five years, the National Association of Home Builders/Wells Fargo builder confidence index showed this week. The S&P/Case- Shiller index of prices in 20 cities fell 0.7 percent in the 12 months through May, the smallest decline since September 2010.
An index of applications for refinancing fell 5.1 percent in the week ended Aug. 10, the Washington-based Mortgage Bankers Association said yesterday. The group’s purchase gauge dropped 2 percent.
To contact the reporter on this story: Noah Rayman in New York at email@example.com
To contact the editor responsible for this story: Kara Wetzel at firstname.lastname@example.org