U.S. mortgage rates were little changed, keeping borrowing costs close to record lows after home prices rose the most in almost seven years.
The average rate for a 30-year fixed loan was 3.52 percent in the week ended today, up from 3.51 percent, McLean, Virginia- based Freddie Mac (FMCC:US) said in a statement. The average 15-year rate held at 2.76 percent.
The U.S. housing market is rebounding as interest rates hover near historic lows, helping to fuel demand for a shrinking supply of property listings. Home prices jumped 9.7 percent in the 12 months through January, the biggest gain since April 2006, according to CoreLogic Inc., an Irvine, California-based real estate data firm.
“House prices rose strongly at the start of 2013 and are likely to perform well across the year as a whole,” Paul Diggle, property economist for Capital Economics Ltd. in London, said in a note to clients March 5 after CoreLogic’s data were released. “This is set to be another tear-away year for the housing recovery.”
The Mortgage Bankers Association’s index of home-loan applications rose 14.8 percent in the period ended March 1, the most in seven weeks. The refinance gauge also jumped 14.8 percent, while the purchase measure climbed 15 percent, the Washington-based group reported yesterday.
A survey released today by Fannie Mae, Freddie Mac’s larger rival, showed that 48 percent of Americans believe home prices will rise in the next 12 months, the highest level since the monthly poll began in June 2010. The share of Americans who think mortgage rates will climb increased to 45 percent in February from 41 percent the previous month.
The average 30-year mortgage rate dropped to a record 3.31 percent in November, according to Freddie Mac. The 15-year rate fell to 2.63 percent, also the lowest on record.
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