NEW YORK - U.S. mortgage rates held steady just above 5 percent in the latest week after mixed signals on the health of the housing market, Freddie Mac said on Thursday.
Average 30-year home loan rates inched up 0.03 percentage point in the week ended Oct. 29 to 5.03 percent.
This fixed borrowing cost has risen from a record low of 4.78 percent set in April, but remains almost 1-1/2 points lower than a year ago, said Freddie Mac, the second-largest U.S. home funding source said.
Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971, Frank Nothaft, Freddie Mac's chief economist, said in a statement.
As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year, according to Freddie Mac data, he said.
Government stimulus efforts, including up to $1.45 trillion of mortgage-related debt purchases by the Federal Reserve -- the U.S. central bank, have sliced and held down borrowing costs to bolster the housing market and the economy.
Demand for mortgages, however, slid last week for the third straight week, with home purchase applications the weakest since mid-May and refinancing requests at a two-month low.
Many borrowers who would have applied for the federal $8,000 first-time buyer tax credit in the past week would be unlikely to close on their loans before the Nov. 30 deadline.
Congress is hashing out a possible extension of the tax credit to keep stoking the fragile housing market. [ID:nN28300178]
In reporting a 9.4 percent jump in existing home sales for September, the National Association for Realtors last week said first-time buyers accounted for more than 45 percent of sales during the past year.
New home sales, however, posted a surprise 3.6 percent drop last month, the Commerce Department said on Wednesday after rising the five prior months. (Reporting by Lynn Adler; Editing by James Dalgleish)