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30-year fixed-rate mortgage rises

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January 27, 2012|By Associated Press

WASHINGTON - The average rate on the 30-year fixed mortgage rose this week for the first time this month, though it remained below 4 percent for the eighth straight week.

The low rates may be contributing to a slow turnaround in the depressed housing market. Still, many who can afford to buy or refinance a home have already done so.

Freddie Mac said yesterday that the average rate on the 30-year fixed mortgage rose to 3.98 percent this week. That is up from 3.88 percent the previous week, the lowest level on record.

The average on the 15-year fixed mortgage also rose to 3.24 percent, from 3.17 percent the previous week. The 15-year mortgage hit a record low of 3.16 percent two weeks ago.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent.

For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Historically low mortgage rates are among the signs that point to a pickup in the housing market this year.

Sales of previously occupied homes rose in December. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.

Still, sales of new homes fell in December, the Commerce Department said yesterday. About 302,000 new homes were sold last year, making 2011 the worst year for new home sales on records dating to 1963.