AVERAGE U.S. FIXED RATES HAVE RISEN

Average U.S. rates on fixed mortgages have risen for a fourth straight week, remaining slightly above record lows. Cheap mortgages have helped fuel a modest housing recovery this year. Mortgage buyer Freddie Mac says the rate on the 30-year loan increased to 3.66 percent, up from 3.62 percent last week. Four weeks ago, the rate fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, edged up to 2.89 percent. That’s up from 2.88 percent last week and from the record low of 2.8 percent four weeks ago.The availability of low rates has lifted home sales higher this year. Prices also have increased, largely because the supply of homes has shrunk while sales have risen. Builder confidence is also at its highest level since March 2007, according to a survey by the National Association of Home Builders.

The housing market’s recovery will likely add to economic growth in 2012 for the first time in seven years. Home purchases, construction and prices are gradually but consistently increasing, though they remain far below levels seen in a healthy economy.

Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors reported this week. Over the past 12 months, sales have jumped more than 10 percent.New-home sales have been strengthening, too. Sales in the United States rose 3.6 percent in July to match a two-year high reached in May, the Commerce Department said Thursday. The seasonally adjusted annual rate last month was 372,000, though still well below the 700,000 pace that economists consider healthy. Toll Brothers, a builder of high-end homes, is enjoying its most sustained demand in more than five years.

It’s all a big change for the residential real estate industry, which has been a major drag on the economy since the housing bubble burst more than five years ago. Still, the housing market has a long way to go to reach a full recovery. The pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.The average fee for 30-year loans was 0.7 point, up from 0.6 point last week. The fee for 15-year loans also increased to 0.7 point from 0.6.
The average rate on one-year adjustable rate mortgages fell to 2.66 percent from 2.69 percent last week. The fee for one-year adjustable rate loans was unchanged at 0.4 point. The average rate on five-year adjustable rate mortgages rose to 2.8 percent from 2.76 percent. The fee held steady at 0.6 point.