LOS ANGELES – Jan. 28, 2011 – The average rate on a 30-year fixed mortgage rose for the second week in a row, buoyed by higher bond yields.
Freddie Mac said Thursday that the average rate rose to 4.80 percent this week from 4.74 percent the previous week. The average rate on the 15-year loan, a popular refinance option, inched up to 4.09 percent from 4.05 percent.
Mortgage rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasurys bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
The 30-year loan rate reached a 40-year low of 4.17 percent in November, and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records dating back to 1991.
Record high foreclosures, a weak job market and expectations that prices will fall further have convinced potential buyers to hold off on purchasing homes. And historically low rates have done little to boost demand.
Fewer people bought previously owned homes last year than in any year since 1997, according to the National Association of Realtors. Sales fell 4.8 percent last year to 4.91 million units, the worst level in 13 years.
And sales of newly built homes fared even worse, sinking last year to the lowest level on records going back 47 years.
Still, sales of previously occupied homes showed some improvement in December, rising to the strongest pace since May, while sales of new homes jumped to the highest level since April.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage rose to 3.70 percent from 3.69 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on one-year adjustable-rate home loans edged up to 3.26 percent from 3.25 percent.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year and 15-year loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM was 0.7 point, and the fee for the 1-year ARM was 0.6 point.