Bloomberg News

U.S. Mortgage Rates Little Changed Close to Record Lows

November 08, 2012

Mortgage rates were little changed, keeping borrowing costs close to record lows after home prices increased in more U.S. cities.

The average rate for a 30-year fixed mortgage climbed to 3.4 percent in the week ended today from 3.39 percent, Freddie Mac said in a statement. The average 15-year rate fell to 2.69 percent from 2.7 percent, according to the McLean, Virginia- based mortgage-finance company.

Low interest rates are making real estate more affordable, while rising demand is bolstering values. Single-family home prices climbed in the third quarter from a year earlier in 120 of 149 U.S. metropolitan areas measured, the National Association of Realtors said in a report yesterday. In the second quarter, 110 areas had gains.

“There is absolutely a direct relationship between falling interest rates and rising prices,” Keith Gumbinger, vice president of HSH.com, a Pompton Plains, New Jersey-based mortgage-information website, said yesterday in a telephone interview. “More borrowers can come out and participate in markets that would have been considered too expensive for them.”

The 30-year average reached an all-time low of 3.36 percent last month, while the 15-year hit a record of 2.66 percent, according to Freddie Mac.

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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