Mortgage Rates Largely Unchanged This Week

Mortgage rates remained essentially unchanged this past week, rising only by the smallest of margins, according to two of the nation's leading rate surveys.

The average rate for 30-year fixed rate mortgages rose a mere two basis points, to 5.14 percent, according to the weekly Freddie Mac survey. Meanwhile, the weekly survey by Bankrate reported an increase of only a single basis point, to 5.53 percent for 30-year loans.

The discrepancy between the two surveys is due in part to different assumptions about points and fees paid; the Freddie Mac survey reports an average of 0.7 discount and origination points, the Bankrate survey only 0.32 points; paying higher points provides a lower interest rate.

"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist."

He noted that continuing low rates enabled existing home sales to increase for the fourth consecutive month, reaching their highest level in two years, according to figure provided by the National Association of Realtors. Meanwhile, new home sales rose to an annual rate of over 400,000 last month, their highest rate since last September.

Low rates continued to spur interest among homeowner seeking to refinance their mortgages, with applications for mortgage refinances rising for the third week in a row last week, according to the Mortgage Bankers Association. Refinance activity was up 12.7 percent last week, according to the MBA.

Meanwhile, applications for mortgages to purchase a home rose only slightly, up 1 percent from the week before despite continued low rates and the looming end of an $8,000 federal tax credit for first-time homebuyers that has been widely credited for spurring sales this year. Many observers expect that Congress will eventually extend the credit past the current Nov. 30 deadline, but it is not yet clear if Congress will actually do so or what form an extension might take.