Mortgage rates rise to 4.5 percent

Mortgage rates are going up as the economic outlook brightens.

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    A woman walks past a Wells Fargo Home Mortgage office in La Habra, Calif., Oct. 7. Since hitting 50-year lows a month ago, mortgage rates have been climbing and are now near 4.5 percent on a 30-year fixed-rate loan.
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Rates on fixed mortgages edged up again this week after hitting their lowest level in decades last month.

Freddie Mac said Thursday that the average rate for 30-year fixed loans rose to 4.46 percent from 4.40 percent last week. Three weeks ago, the rate hit 4.17 percent, the lowest level on records dating back to 1971.

The 15-year loan also rose, to 3.81 percent from 3.77 percent. It hit its lowest point since the survey began in 1991 a month ago, when rates fell to 3.57 percent.

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The brightening economic picture has reversed the direction of mortgage rates, which had been falling since April. Investors seeking higher returns are shifting money from bonds into riskier investments such as stocks.

As demand for Treasurys decreases, investors demand higher yields from the government. Mortgage rates tend to track those yields.

Those yields have risen from yearly lows as the economic picture brightened over the past month. They climbed again Wednesday after reports showed factories boosting production, auto sales rising and many regions of the country seeing stronger economic growth.

The low rates have had a limited impact on the struggling housing market. The number of people signing contracts to buy homes increased for the third straight month in October, the National Association of Realtors said Thursday. But contract signings remained low after hitting a decade low in June.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

Rates on five-year adjustable-rate mortgages averaged 3.49 percent, up from 3.45 percent a week earlier.

Rates on one-year adjustable-rate home loans edged up to 3.25 percent from 3.23 percent last week.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.

The average fee for a 30-year mortgage in Freddie Mac's survey was 0.8 point. It was 0.7 point for 15-year fixed loans and 0.6 point for five-year and one-year mortgages.

The fees were unchanged from last week.

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