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Rising U.S. Mortgage Rates Threaten Housing Recovery

Rising U.S. Mortgage Rates Threaten Housing Recovery

Residential News » North America Residential News Edition | By WPJ Staff | February 27, 2014 10:42 AM ET



Mortgage rates in the U.S. increased for the third straight week, possibly threatening the continued housing recovery, according to Freddie Mac.

The 30-year fixed-rate mortgage averaged 4.37 percent this week, up from last week's 4.33 percent. A year ago at this time, the average was 3.51 percent. 

The 15-year fixed-rate mortgage averaged 3.39 percent, up from 3.35 percent a week ago. At this time last year, it was 2.76 percent. 

"Mortgage rates edged up with new home sales exceeding expectations and rising to a seasonally adjusted pace of 468,000 units in January, the strongest annual rate since July 2008. The 9.6 percent increase in new home sales for January followed an upward revision of 13,000 units in December," Frank Nothaft, vice president and chief economist, Freddie Mac, said in the report. "The S&P/Case-Shiller 20-city composite house price index rose 13.4 percent over the 12-months ending in December 2013."

Rising mortgage rates are seen as a detractor to the recovering housing market as affordability dwindles for home buyers, analysts say. Yesterday the Mortgage Bankers Association reported the seasonally adjusted mortgage purchase index dropped to the lowest level since 1995

The one-year treasury-indexed ARM averaged 2.52 percent this week, down from 2.57 percent last week. At this time last year, the 1-year ARM averaged 2.64 percent.


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