U.S. 30-year fixed-rate home mortgage rates edged up last week in response to the recent turmoil in stock markets.
The average rate on a 30-year fixed-rate mortgage rose to 7.24 percent in the week ended Nov. 6 from 7.21 percent the previous week, Freddie Mac said.
Freddie Mac also reported that the average adjustable mortgage rate mortgage rose to 5.48 percent from 5.46 percent last week. Fifteen-year mortgage rates averaged 6.80 percent, up from 6.76 percent in the previous week.
This week, “interest rates rose slightly as investment funds were taken out of the bond market and placed back into the stock market,” said Robert Van Order, chief economist at Freddie Mac.
A week ago, investors bought bonds as a safe haven — pushing prices up and yields down — as the stock market took its worst beating of the decade. The yield on the Treasury’s 10-year note, a benchmark for mortgage rates, fell 8 basis points to 5.93 percent in the past two weeks.
Despite uncertainty in the markets, low mortgage rates have kept the housing market on good footing, even before the recent decline in U.S. stocks. Starts of new housing rose 7.9 percent in September to an annual rate of 1.500 million after falling a revised 5.1 percent to 1.390 million, Commerce Department figures showed. Building picked up in all regions.
The government also reported new home sales — a key barometer of consumer demand — fell 0.2 percent to a seasonally adjusted annual rate of 800,000 in September after declining a revised 2.3 percent in August to 802,000.
New home sales, though, remained on a record-setting path, averaging at an annual pace of 803,000 this year. That’s up from last year’s 756,000 sales, which was the strongest year in almost two decades. The last time new home sales stayed above the 800,000 mark for four consecutive months — as they have since June — was between August and December 1977, a government spokeswoman said.
Sales of existing homes — which makes up more than 85 percent of the market — set a record for the second month in a row in September, rising 0.2 percent during the month to an annual rate of 4.320 million, according to the National Association of Realtors. That topped the revised 4.310 million rate reported for August — also a record — and it marks the fourth consecutive monthly increase.
The Mortgage Bankers Association of America’s index of mortgage applications also rose last week as mortgage rates fell.
The MBA’s index jumped 26.9 percent in the week ended Oct. 31 to 348.3. The index measures how many mortgage applications U.S. mortgage bankers receive each week, adjusted to account for seasonal changes and holidays.
The indexes gauging demand for new homes and refinancing also both increased last week. The association’s refinancing applications index rose 48.4 percent to 1013.4, while the index for applications to purchase homes rose 14.5 percent to 233.9.
Last week’s rise puts the overall index above its third-quarteYr average of 277.2, which analysts had expected in response to a drop in interest rates.
Since the economy continues to expand, banks and other companies that buy home loans — including Freddie Mac, Fannie Mae, CWM Mortgage Holding Associates, and General Electric Capital, a subsidiary of General Electric Co. — could see an increase in the number of available mortgages.
Freddie Mac’s weekly survey measures the national average commitment rate for 80 percent loan-to-value mortgage loans during a one-week period. The government-sponsored enterprise is one of the largest investors in U.S. home mortgages.
The weekly report doesn’t include points, additional financing charges that consumers can pay initially to lower the annual interest rates on their mortgages.
