Mortgage rates in the United States rose to a 10-month high, reducing affordability rates for home buyers, as the market struggles to recover from dip levels.
Mortgage-finance company Freddie Mac said 30-year fixed-rate mortgages climbed 5.05 percent in the week ended 10 February, while the average rate of 15-year fixed-rate mortgages surged 4.29 percent from 4.08 percent in the previous week.
“It will have a slight dampening impact on home buying,” said Paul Dales, Senior US Economist at Capital Economics Ltd. “Mortgage rates around five percent are still very low by historical standards but these increases do seem to be putting people off.”
According to a Mortgage Bankers Association index, loan applications dropped 1.4 percent for the second time in three weeks, while the refinancing index fell 7.7 percent.
US mortgage rates are increasing along with yields on the 10-year Treasury note, hitting a nine-month high this week. The surging of borrowing costs from low levels in November last year may reduce purchase demand, as the market enters the spring selling season.