RealEstateEconomyWatch.com

Borrowing costs for households seeking to purchase a home or refinance their mortgage loan rose slightly during the week ending October 15 according to a well known mortgage rate survey released on Wednesday.

The 30-year fixed-rate mortgage averaged 4.92 percent for the week of October15, up from a 4.87 percent rate posted one week earlier according to Freddie Mac’s weekly primary mortgage market survey. The popular mortgage rate remains comfortably below the 5 percent watermark and continues to hover near historic levels.

The survey also reported that the 15-year fixed-rate mortgage averaged 4.37 percent for the current week, up from last week when it averaged 4.33 percent. The 1-year adjustable-rate mortgage rose to 4.60 percent in this week’s survey compared to a 4.53 percent rate in last week’s survey.

Long term mortgage rates remained below 5 percent for the third consecutive week.  Historically low mortgage rates are keeping homes affordable and are enticing first-time homebuyers to purchase homes. Affordability measures have been hovering near record levels all year long.

Low mortgage rates are also driving refinancing transactions. A weekly survey conducted by the Mortgage Bankers Association released on Wednesday, reported that in the week ending October 9, refinancing applications comprised 67.4 percent of total mortgage applications. The association’s refinance index is up almost 38 percent from four weeks ago and up almost 123 percent from a year ago. However, the survey’s purchase index, which measures mortgage application activity to purchase homes, fell 5 percent for the week due to the slight increase in mortgage rates.

This week’s mortgage rate survey is consistent with the accommodative monetary policies of the Federal Reserve. Low mortgage rates are keeping borrowing costs low for households that are seeking to purchase a home. Low mortgage rates have played an important role in supporting modest gains in home sales since the beginning of this year. Recent data indicate a modest housing recovery is underway.