Mostly positive housing market data helped push up average fixed mortgage rates for a third consecutive week as new home sales beat estimates, according to Freddie Mac.
Nonetheless, mortgages rates remain near their late May 2013 lows, with the 30-year fixed at 3.8 percent.
Sales of new U.S. single-family home fell only slightly in January, despite big declines in the snow-weary Northeast. Meanwhile, supply jumped to its highest level since 2010, a good sign for the sluggish housing market as spring approaches.
The Commerce Department said on Wednesday that sales dipped 0.2 percent to a seasonally adjusted annual rate of 481,000 units. But economists had forecast new home sales, which account for about 9.1 percent of the housing market, falling to a 470,000-unit pace last month.
“Mortgage rates rose for the third consecutive week in February following solid housing data,” sad Len Kiefer, deputy chief economist, Freddie Mac.
In other key housing data out this week, the S&P/Case-Shiller National House Price Index rose 4.6 percent over the 12-months ending in December 2014.
“While prices and sales of existing homes are close to normal, construction and new home sales remain weak,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.”
Borrowers are still looking at historically low mortgage rates as the Federal Reserve ponders raising its benchmark federal funds rate, which has been “near zero” since September 2008.
Fed Chair Janet Yellen said Wednesday that the central bank could raise interest rates before inflation picks up, which is a major factor for the central bank. Fed policy makers could begin raising rates later this year as long as they foresee price increases accelerating, while the job market continues to advance.
Many economists expect the Fed to increase its benchmark short-term rate as early as June. The federal funds rate serves as a benchmark for consumer borrowing costs, including interest rates on mortgages.
Here is Freddie Mac’s rundown on mortgage rates for this week:
30-year fixed-rate mortgage (FRM) averaged 3.80 percent, with an average 0.6 point for the week ending February 26, 2015, up from last week when it averaged 3.76 percent. A year ago at this time, the 30-year FRM averaged 4.37 percent.
15-year FRM this week averaged 3.07 percent, with an average 0.6 point, up from last week when it averaged 3.05 percent. A year ago at this time, the 15-year FRM averaged 3.39 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99 percent this week, with an average 0.5 point, up from last week when it averaged 2.97 percent. A year ago, the 5-year ARM averaged 3.05 percent.
1-year Treasury-indexed ARM averaged 2.44 percent this week, with an average 0.4 point, down from last week when it averaged 2.45 percent. At this time last year, the 1-year ARM averaged 2.52 percent.