U.S. mortgage rates near two-year high

U.S. mortgage rates inched close to a two-year high last week, Freddie Mac said. A 30-year fixed mortgage increased from a rate of 4.57 percent this week from 4.51 percent, according to data from Freddie cited by Bloomberg News. For 15-year fixed mortgages, the rate was up to 3.59 percent from 3.54 percent.

Thanks to the jump from May’s near-record low of 3.35 percent, home affordability has drooped and sent some would-be home buyers packing. Fewer prospective home buyers are even applying for loans, with applications dropping 15 percent in the past four months, according to data from the Mortgage Bankers association cited by Bloomberg.

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“Higher rates do push buyers to the sidelines,” Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage data firm, told Bloomberg. “Some borrowers will step out, some borrowers will change their choices and look for less-costly homes.”

New home sales and contracts to purchase existing homes also both fell in July. [Bloomberg]Julie Strickland