Tags: Mortgage | Rates | Loans | Increase

Mortgage Rates for 30-Year U.S. Loans Increase From Record Low

Thursday, 13 Oct 2011 10:34 AM

U.S. mortgage rates climbed from the lowest level on record after better-then-expected economic data and optimism that Europe’s debt crisis will be contained drove up yields for the Treasurys that guide home loans.

The average rate for a 30-year fixed loan increased to 4.12 percent in the week ended today from 3.94 percent, Freddie Mac said in a statement today. That was the lowest in Freddie Mac records dating back to 1971. The average 15-year rate rose to 3.37 percent from 3.26 percent last week, according to the McLean, Virginia-based mortgage-finance company.

Ten-year Treasury yields, a benchmark for mortgages, rose to a six-week high yesterday after European Commission President Jose Barroso called for a “coordinated approach” to recapitalize the region’s banks. U.S. employers added more workers than forecast in September while the jobless rate held at 9.1 percent, the Labor Department said last week.

“The economic news has not been nearly as bleak as we’ve become accustomed to,” said Keith Gumbinger, vice president of HSH Associates, a loan-data firm in Pompton Plains, New Jersey. “Money has crept its way out of the safe havens of Treasuries and back into equities and there’s been a slight lift in interest rates as a result.”

Low borrowing costs have done little to bolster the housing market as banks tighten credit and foreclosures mount. Default notices sent to delinquent homeowners rose 14 percent in the third quarter from the previous three months, according to RealtyTrac Inc., a sign lenders may be speeding up the repossession process after a probe into bank documentation procedures.

Applications Increase

Home-loan applications increased in the period ended Oct. 7 from the prior week, according to a Mortgage Bankers Association index. A gauge of refinancing rose 1.3 percent and the purchasing measure climbed 1.1 percent, the Washington-based group said yesterday.

The number of contracts to purchase previously owned homes declined 1.2 percent in August, according to the National Association of Realtors. The S&P Case-Shiller index of home values in 20 U.S. cities decreased 4.1 percent in July from a year earlier.

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U.S. mortgage rates climbed from the lowest level on record after better-then-expected economic data and optimism that Europe s debt crisis will be contained drove up yields for the Treasurys that guide home loans.The average rate for a 30-year fixed loan increased to 4.12...
Mortgage,Rates,Loans,Increase
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2011-34-13
Thursday, 13 Oct 2011 10:34 AM
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