Mortgage rates for 30-year loans climbed for a second week, cutting into affordability as the housing recovery shows signs of cooling.
The average rate for a 30-year fixed mortgage was 4.33% this week, up from 4.28%, Freddie Mac said today. The average 15-year rate rose to 3.35% from 3.33%, the McLean, Va.-based mortgage-finance company said.
While the job market is improving, higher prices and borrowing costs are making it more expensive to own a home. Monthly payments on a median-priced three-bedroom homeŚincluding mortgage, insurance, taxes and maintenanceŚrose an average of 21% in the fourth quarter from a year earlier, according to an analysis of 325 U.S. counties by RealtyTrac released today. Mortgage rates jumped to a two-year high in August from near-record lows in May, Freddie Mac data show.
"The cost of financed homeownership is becoming dangerously disconnected with still-stagnant median incomes," Daren Blomquist, vice president at Irvine, Calif.-based RealtyTrac, said in the report.
Starts for single-family houses slumped in January, in part because of unusually harsh weather in much of the U.S. Builders began work on 573,000 homes at an annualized rate last month, down 15.9% from December and the fewest since August 2012, Commerce Department data issued yesterday show.
Confidence among homebuilders dropped in February by the most on record as snowstorms on the East Coast limited prospective buyer traffic, according to the National Association of Home Builders/Wells Fargo sentiment gauge released this week.