The average rate for a 30-year fixed mortgage slipped to 4.42% this week from 4.46%, according to Freddie Mac. The average 15-year rate is 3.43%, down from 3.47%, the McLean, Va.-based company says.
Mortgage rates have jumped since May as the economy improves and the central bank weighs how soon it should scale back bond purchases aimed at keeping borrowing costs down. The Federal Open Market Committee may start tapering the stimulus at its Dec. 17-18 meeting, according to 34% of economists surveyed by Bloomberg on Dec. 6, an increase from 17% last month.
“The economy is holding its own despite facing serious challenges,” says Keith Gumbinger, vice president of HSH.com. “The likelihood is somewhat higher rates rather than somewhat lower rates over the next 60 to 90 days.”
Employers added 203,000 jobs in November, more than economists projected, sending the unemployment rate to a five-year low of 7%, Labor Department data showed last week.
The 30-year rate has climbed from a near-record low of 3.35% in May, contributing to a slowdown in residential sales. Contracts for purchases of previously owned homes fell in October for a fifth straight month, according to the National Association of Realtors.
Toll Brothers Inc., the largest U.S. luxury-home builder, said this week that the jump in interest rates were a reason for slower order growth in its fiscal fourth quarter. Contract signings were flat in the first five weeks of the Horsham, Pa.-based company’s current fiscal year, which began in November.