Mortgage rates continued their steady upward trend on Thursday, hitting 5% for 30-year fixed rates for the first time since May. The average rate for 15-year fixed mortgages rose to 4.37%, and jumbos came in at 5.58%.
On Nov. 3, mortgage interest rates were at an all-time low of 4.42%, according to Bankrate.com in a news report about its national survey of large lenders. However, recent economic events, including the deficit, higher retail sales and an improvement in the economic outlook, sent bond investors looking for more return. Mortgage rates can mirror long-term government bond yields.
In other U.S. housing market news, new housing starts saw their first increase in three months, as builders in November began work on 3.9% more homes than in October. That puts starts at an annual rate of 555,000, higher than initially estimated, according to the Department of Commerce report. Completions were down 14.1% from October’s estimates, coming in at a seasonally adjusted rate of 513,000.
Single-family housing starts in November stood at a rate of 465,000, 6.9% above the revised October figure of 435,000. Permits were down, falling 4.0% from the revised October rate of 552,000, to come in at a seasonally adjusted 530,000. All housing starts figures are down substantially from November of 2009.
Foreclosures still on the rise and high unemployment hovering close to 10% are putting pressure on the housing market, making it likely that any real improvement is years away, analysts say.