U.S. fixed mortgage rates held steady under 5 percent over the past week, Freddie Mac said on Thursday, amid signs that winter storms overcame low borrowing costs to quell housing activity.
The average 30-year mortgage rate was 4.96 percent in the week ended March 18, little changed from 4.95 percent a week earlier and 4.98 percent a year ago, the second-largest U.S. home funding company said.
Lenders charged 0.7 point in fees, on average, the same as the prior week.
Winter storms snuffed out home building in much of the country, dragging construction down 5.9 percent in February, while builder confidence unexpectedly fell in March.
Demand for mortgages also declined in the latest week even though 30-year loan rates held below 5 percent, the Mortgage Bankers Association said on Wednesday.
Beyond the weather, many potential home buyers are hesitating with near double-digit unemployment and concerns about job stability at the forefront, economists and housing experts have said.
The housing market is not without some bright spots, as stabilizing or even rising prices are helping current owners slowly rebuild equity in their houses, Frank Nothaft, Freddie Mac chief economist, said in a statement.
"After losing almost $7.9 trillion in home equity since the end of 2006, homeowners regained almost $1.1 trillion over the past three quarters ending in 2009," he said, citing Federal Reserve figures.
The Fed — the U.S. central bank — this week restated its pledge to keep benchmark interest rates low for an extended period, part of sweeping efforts to restore health to the battered housing market and the economy, which is recovering from the worst recession in decades.
Mortgage rates are seen trending higher once the Fed ends its more than $1.4 trillion in mortgage-related securities purchases at the end of this month.
In its March housing and economic outlook, Freddie Mac forecast a 30-year mortgage rate rise to 5.6 percent in the fourth quarter.
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