WASHINGTON (AP) — Average U.S. rates for fixed mortgages slipped this week as new data showed a decline in home prices in November and a drop in new homes sales last month.
Mortgage buyer Freddie Mac said Thursday the average for the 30-year loan fell to 4.32 percent from 4.39 percent last week. The average for the 15-year loan eased to 3.40 percent from 3.44 percent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. Deeming the economy to be gaining in strength, the Fed pushed ahead Wednesday with a plan to reduce the bond purchases, which have kept long-term interest rates low.
Data issued this week suggested a pause in the housing market’s recovery. Home prices fell slightly in November as colder weather slowed buying, ending nine straight months of price gains, the Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday showed.
The Commerce Department reported Monday that sales of new homes fell in December for a second straight month. Even with the end-year decline, though, home sales for 2013 climbed to the highest level in five years.
Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast sales and prices will likely rise around 5 percent, down from double-digit gains in 2013.
The National Association of Realtors said Thursday that fewer Americans signed contracts to buy previously occupied homes last month. Cold weather stalled home purchases.
