U.S. mortgages rates fell for the first time in five weeks, lowering borrowing costs for homebuyers amid signs of a real estate recovery.
The average rate for a 30-year fixed mortgage fell to 3.59 percent in the week ended Thursday from 3.66 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate was 2.86 percent, down from 2.89 percent.
Interest rates close to record lows are helping spur demand as buyers compete for a dwindling supply of properties. Pending U.S. home resales climbed 2.4 percent in July, more than double the forecast in a Bloomberg News survey of economists, data from the National Association of Realtors showed Wednesday. The S&P/Case-Shiller index of prices in 20 cities climbed in June from a year earlier, the first such gain since September 2010.
“We are on the road to recovery,” Nicolas Retsinas, a senior lecturer in real estate at Harvard Business School in Boston, said in a telephone interview. “But the road is likely to have some potholes.”
The average rate for a 30-year loan reached a record-low 3.49 percent in the week ended July 26.
The housing market has been restrained by an overhang of foreclosures and tight credit. The Mortgage Bankers Association’s home loan applications index fell 4.3 percent in the period ended Aug. 24 from the prior week, the Washington-based group reported. The refinance gauge dropped 5.7 percent, while the purchase index rose 1.4 percent.
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