Mortgage rates jump to highest since September
But home sales keep pace even as interest rates continue steady climb.
The average rate for a 30-year fixed mortgage was 4.46 percent this week, up from 4.29 percent, according to a statement on Thursday from Freddie Mac. The average 15-year rate rose to 3.47 percent from 3.3 percent, the McLean, Va.-based mortgage-finance company said.
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Mortgage rates have climbed from a near-record lows in May as the Fed weighs how soon it should scale back its stimulus. Yields for 10-year Treasury notes, a benchmark for home loans, rose to the highest level in more than two months yesterday after a private report showed U.S. payrolls increased more than economists estimated, adding to bets the central bank may advocate slowing bond purchases at this month’s policy meeting.
"To the extent that the economy is getting better, you can make the claim that the Federal Reserve is more likely to taper sooner rather than later," said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage website.
Purchases of new homes rebounded in October from the lowest level in more than a year, indicating buyers are starting to take higher rates in stride. New-home sales jumped 25 percent to a 444,000 annualized pace, following a 354,000 rate in the prior month that was the weakest since April 2012, the Commerce Department said on Wednesday.
"New-home sales were still suffering the effects of the rise in mortgage interest rates in September, but fully made up for their earlier weakness in October," Paul Diggle, property economist for Capital Economics Ltd. in London, wrote in a note to clients yesterday. "Higher rates do not appear to have done lasting damage to the housing recovery."
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