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Freddie Mac: 30-year mortgage rate levels off at 4.5%

Mortgage rates leveled off this week, according to a Freddie Mac survey that found the 30-year home loan up a single notch and the 15-year mortgage down by the same amount.

The survey said lenders were offering 30-year fixed-rate loans to well-qualified borrowers at an average 4.50% compared with 4.49% last week and rates in the 4.2% range for a couple of months last fall.

The 15-year fixed loan was at 3.67%, down from 3.68%, Freddie Mac said Thursday. The borrowers would have paid an average 0.7% of the loan amount to the lenders in upfront fees and points for the fixed-rate loans.

Adjustable rate loans, for those tempted by the riskier mortgages, are “at or near record lows,” Freddie Mac economist Frank Nothaft said in an economic outlook report this week.

The start rate on Treasury-indexed home loans that become adjustable after five years at a fixed rate averaged 3.27% this week, with 0.6% in lender fees, down from last week’s 3.28%.

Treasury-indexed loans that adjust once a year averaged 2.97% with an average 0.5% of the loan amount in lender fees, up from last week’s 2.95%.

With the rates so low and home prices edging lower again in many areas, housing affordability is very high — but not so consumer confidence these days, Nothaft noted. From his outlook report:
Consumers who feel heightened uncertainty over their economic well-being and future prospects are more likely to be cautious when considering purchases of big-ticket items, such as cars or homes.

Further, the first-quarter data on U.S. house-price softness has removed a catalyst to immediate action: Some potential buyers who have the means to buy are awaiting clearer signs that home values have firmed.

Buyers’ hesitancy and the continuing foreclosure crisis have resulted in greater demand for apartments. Vacancy rates in buildings with at least five apartments have steadily drifted lower over the past year, Nothaft noted, while monthly rents have risen.