Mortgage Rates Creep Higher, Home Sales Rise

Lawrence Yun

For the fourth week in a row, home mortgage rates have crept higher, though they are still just a few notches above all-time lows. According to Freddie Mac, the average 30-year fixed rate mortgage (FRM) was 3.66 percent with an average 0.7 point for the week ending August 23, 2012, up from last week when it averaged 3.62 percent.

For those shopping for a 15-year fixed rate mortgage, the average rate this week is 2.89 percent with an average 0.7 point. That’s still a half point lower than a year ago.

While it is harder than it used to be to qualify for a low-rate mortgage — or any mortgage, for that matter — middle- and upper-income consumers with good employment records should have no problem, assuming they have a healthy down payment.

“The Census Bureau reported that residential building permits were up in July, although builders slowed the pace of construction starts on one-family homes in July to the least since March while apartment and condominium building picked up to the most since April,” said Frank Nothaft, vice president and chief economist, Freddie Mac.

Sales up in July

Sales of existing homes in the U.S. rose 2.3% in July, as low mortgage rates, rising rent and some job creation led to a modest rebound, the National Association of Realtors (NAR) said. Sales increased to a seasonally adjusted annual rate of 4.47 million from 4.37 million in June.

Lawrence Yun, NAR chief economist, said housing affordability conditions are very good.

“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates.  Combined, these factors are helping to unleash a pent-up demand,” he said.  “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”

NAR is asking the government to expeditiously release the foreclosed properties it owns in inventory-constrained markets.

 

 

 

 

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Truman Lewis
A former reporter and bureau chief, Truman Lewis has covered presidential campaigns, state politics and stories ranging from organized crime to environmental and consumer protection.