Mortgage rates flat, Freddie Mac says, but hike may be near
But news that the U.S. economy is growing and that European leaders have reached a deal to reduce Greece's staggering debt load could push the cost of borrowing back higher.
Freddie Mac said Thursday in its weekly report that the 30-year rate averaged 4.10% this week for solid borrowers who paid 0.8% of the loan amount in lender fees and discount points. That was down a notch from 4.11% last week.
The typical 15-year fixed rate held steady at 3.38% with an average of 0.7% of the loan amount paid in extra fees upfront.
Freddie Mac asks lenders across the country what rates they are offering to borrowers who pay only small fees to get the loans. The rates are for borrowers with solid credit and 20% down payments or home equity.
Freddie Mac economist Frank Nothaft said housing market indicators were mixed, with consumer confidence soft, house prices largely flat and new home sales up -- but from very low levels.
However, today's good news on the European debt crisis and the U.S. economy, which the government said grew 2.5% in the third quarter, may exert some pressure for higher rates.
When things are looking better, fewer investors tend to seek shelter in U.S. Treasury securities. That in turn could send the yield on the 10-year Treasury higher, and mortgage rates generally follow the lead of that benchmark.
Sure enough, the 10-year Treasury yield was moving higher early Thursday.
-- E. Scott Reckard
Photo: Homes for sale in Santa Clarita last month. Credit: Kirk McKoy / Los Angeles Times