U.S. mortgage rates rose for a second week, increasing borrowing costs as tight supplies of listings drive up home prices.
The average rate for a 30-year fixed mortgage was 3.53 percent in the week ended today, up from 3.42 percent and the highest since September, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate rose to 2.81 percent from 2.71 percent.
U.S. real estate is rebounding as traditional homebuyers compete with investors for a shrinking inventory of homes. The S&P/Case-Shiller index of property values increased 5.5 percent in November, the biggest year-over-year gain since August 2006, according to data released on Jan. 29.
“The rising prices are clearly a good thing for homeowners at the same time they make housing more expensive for those who don’t own but want to buy,” said Jed Kolko, chief economist for San Francisco-based Trulia Inc., which operates an online property-listing service.
Home-loan applications in the U.S. fell last week for the first time this month. The Mortgage Bankers Association’s index decreased 8.1 percent in the week ended Jan. 25 after a 7 percent gain in the prior week, the Washington-based group reported Wednesday. The refinancing gauge dropped 10.2 percent, and the purchase index fell 1.8 percent.
The average 30-year mortgage rate dropped to a record 3.31 percent in November, according to Freddie Mac. The 15-year rate fell to 2.63 percent, also the lowest on record.