Average US rate on 30-year mortgage rises to 3.71 pct.; 15-year up to 2.98 pct (Washington Post)

I've been house hunting for past couple of weeks so haven't been able to post new blogs. But I got to know about the interest rates today and thought of sharing with you all. 

In the meanwhile, if you are a first time home buyer and have any questions to ask in regards to property, location, best time to buy, negotiating the price, arranging money for down payment, home inspection, or loan process, etc then please feel free to post questions here.

WASHINGTON - Average rates on fixed mortgages rose this week, the first increase in seven weeks. But mortgage rates remain near historic lows, boosting prospects for home sales this year.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.71 percent. That's up from 3.67 percent last week, the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, rose to 2.98 percent. That's up from 2.94 percent last week, also a record low.

The rate on the 30-year loan has been below 4 percent since early December. Low rates are a key reason the housing industry is showing modest signs of a recovery this year.

In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.

Low rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

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, unchanged from last week. The fee for 15-year loans also was unchanged at 0.7 point.

The average rate on one-year adjustable rate mortgages slipped to 2.78 percent from 2.79 percent last week. The fee for one-year adjustable rate loans was 0.5, up from 0.4.