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Mortgage rates rise for 1st time in 4 weeks

April 20th, 2012 4:04 PM by Arturo Torres

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Mortgage rates in the United States rose for the first time in four weeks, increasing borrowing costs as demand for housing is slow to recover.

The average rate for a 30-year mortgage climbed to 3.9 percent in the week ending Thursday from 3.88 percent, Freddie Mac said in a statement. The rate touched 3.87 percent in February, which was the lowest since long-term mortgages began in the 1950s.

The 30-year loan is the most common financing option for home buyers.

The average 15-year rate rose to 3.13 percent from 3.11 percent, the lowest in the mortgage-finance company's records.

To calculate the average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

Though the housing market is improving by some measures, weak job growth and stricter lending standards are weighing on a recovery. Sales of previously owned U.S. homes fell in March for the third time in the past four months, declining 2.6 percent from February to a 4.48 million annual rate, the National Association of Realtors reported Thursday.

"We are in the very early stages of a recovery," Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., said in a telephone interview. "For the single-family market, we can barely call it a recovery. Activity is increasing, but just very slowly."

Homeowners are taking advantage of low borrowing costs to reduce their monthly payments. The Mortgage Bankers Association's index of refinancing applications surged 14 percent in the period that ended last Friday, the group reported Wednesday. The purchasing gauge fell 11 percent.



 
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Posted by Arturo Torres on April 20th, 2012 4:04 PM

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