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Home mortgage rates rise as prices drop


The average rate on a 30-year fixed-rate mortgage climbed to 5.05 percent today, the fourth consecutive weekly increase, Bloomberg reported.

The 0.24 percentage point gain for the week ended Feb. 10 brought U.S. mortgage rates to a 10-month high, increasing the cost of home ownership. Yields on the 10-year Treasury note also rose this week to a nine-month high.

In November, the interest rate on a 30-year loan was 4.17 percent, the lowest in 30 years, according to data compiled by Freddie Mac, and the increase in borrowing costs may dampen the housing market this spring.

“It will have a slight dampening impact on home buying,” Paul Dales, senior U.S. economist with Toronto-based Capital Economics Ltd., told Bloomberg. “Mortgage rates around 5 percent are still very low by historical standards, but these increases do seem to be putting people off.”

Tom Tzitzouris, head of the fixed-income department at New York-based Strategas Research Partners LLC, said rates may not slow home buying until they get closer to 6 percent. “If you get another uptick again next week, you may see some movement,” he said.

Today, the National Association of Realtors said home prices in nearly half of all U.S. cities declined in the fourth quarter.

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