Mortgage rates for 30-year loans fell for the first time in four weeks, decreasing borrowing costs for homebuyers as the recovery in prices stretched into 2014.
The average rate for a 30-year fixed mortgage was 4.28% this week, down on a weekly basis from 4.37%, Freddie Mac said today. The average 15-year rate slipped to 3.32% from 3.39%, the McLean, Va.-based mortgage-finance company said.
Home values continue to rise as buyers compete for a limited supply of properties for sale. Prices climbed 12% in January from a year earlier, the 23rd consecutive gain, Irvine, Calif.-based CoreLogic said this week.
"Prices are still growing at very high rates because the markets are still tight," Patrick Newport, an economist with IHS Global Insight in Lexington, Mass., said in an interview yesterday. "We haven’t been building enough homes at high enough rates for five or six years."
Rising prices and tougher credit standards have shut out some first-time buyers, slowing the pace of the housing recovery. First-timers accounted for 26% of purchases in January, down from 30% a year earlier and the smallest share in more than five years of data-keeping, according to the National Association of Realtors.
While purchases rose 8.2% for residences costing more than $250,000, they fell 10.7% for homes worth less, according to the Realtors group.