WASHINGTON: Average interest rates for fixed mortgages fell this week as the latest data continued to indicate a pause in the housing market’s recovery.
Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan declined to 4.23 percent from 4.32 percent last week. The average for the 15-year loan dipped to 3.33 percent from 3.40 percent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. Saying the economy was gaining strength, the Fed pushed ahead last week with a plan to reduce the bond purchases, which have kept long-term interest rates low.
Data released Tuesday by real estate specialist CoreLogic showed that U.S. home prices slipped from November to December, and the year-over-year increase slowed, likely a result of weaker sales at the end of last year.
The December decline was the third straight month-to-month drop. Home prices had risen for eight straight months through September. For all of 2013, prices rose a healthy 11 percent.
The Commerce Department reported Monday that U.S. construction spending rose modestly in December, slowing from healthy gains a month earlier.
Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast that both will likely rise around 5 percent, down from double-digit gains in 2013.
The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan rose to 0.7 point from 0.6 point.
The average rate on a one-year adjustable-rate mortgage fell to 2.51 percent from 2.55 percent. The fee increased to 0.5 point from 0.4 point.
The average rate on a five-year adjustable mortgage slipped to 3.08 percent from 3.12 percent. The fee held at 0.5 point.