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According to Freddie Mac, U.S. mortgage rates for 30-year loans rose from 4.71 percent to 4.74 percent this week. This marks the first time mortgage rates have been increased in three weeks, as the housing market shows signs of recovering. While average rates for 30-year loans–the most common type of mortgage–rose, 15-year rates decreased from 4.08 percent to 4.05 percent, according to the McLean Mortgage Corporation of America. Borrowers enjoyed record-low rates in November of last year, with 30-year mortgage rates at a 40-year low of 4.17 percent. 15-year rates reached an all-time low of 3.57 percent. Since then, rates have increased as the housing market shows tentative signs of recovery. Existing home sales jumped 12.3 percent in December, according to the National Association of Realtors (NAR), as borrowers sought to take advantage of last year’s low mortgage rates.
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Nonetheless, fewer people bought previously owned homes last year than in any year since 1997, according to NAR. According to the Mortgage Bankers Association, U.S. mortgage applications rose 5 percent in the week ending Jan. 14, after increasing 2.2 percent the previous week. Refinancing activity also rose 7 percent, following a 4.9 percent raise the last week. 73 percent of the week’s mortgage applications were for refinancing existing mortgages.