Mortgage rates edge up as housing still slumps
Mortgage rates edge up as housing still slumps
30-year benchmark rises to 4.35 percent with 15-year stuck at 3.83 percent
NEW YORK — Record-low mortgage rates failed to pull the housing market out of its funk. Now rates are inching higher, but don't blame them if home sales stay sluggish.
Just as bargain financing couldn't save the housing market, analysts say, a gradual rise in rates won't necessarily crush it. Cheap money matters less than the larger forces at work, especially a 9.6 percent unemployment rate, which keeps would-be homebuyers in fear of losing their next paycheck.
"What's hurting the housing market right now isn't mortgage rates," said Michelle Girard, senior economist at the Royal Bank of Scotland. "It's a lack of confidence about the U.S. economy. It's concern about losing a job."
On Thursday, Mortgage buyer Freddie Mac said the average rate for a 30-year fixed loan was 4.35 percent, the second rise in the past 12 weeks. That's up from 4.32 percent the previous week, the lowest number since Freddie Mac began tracking rates in 1971.
Rates have been falling since spring as investors have shifted money into safe Treasury bonds. That influx of money has lowered Treasury yields, which mortgage rates tend to track.
Even the lowest interest rates in memory couldn't entice buyers from the sidelines. Sales remain abysmal. The National Association of Realtors reported sales of previously occupied homes plummeted 27 percent in July, the worst showing in 15 years.
Record-low rates combined with falling prices mean houses are now more affordable than in decades. In better times, that might fuel a surge of homebuying. But Americans seem to have taken one lesson from the housing bubble, Girard said: Home prices can fall.
