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Published June 28, 2013, 09:52 AM

Spiking rates test housing market

FARGO – Mortgage rates for 30-year U.S. loans have surged to the highest level in almost two years, increasing borrowing costs at a time when the housing market is strengthening and prices are jumping.

By: Forum staff reports, INFORUM, Forum staff reports, INFORUM

FARGO – Mortgage rates for 30-year U.S. loans have surged to the highest level in almost two years, increasing borrowing costs at a time when the housing market is strengthening and prices are jumping.

Despite the rising cost of buying a home, there’s still a lot of activity here where there are more interested buyers than homes for sale, a local lender said. Many prospective buyers are pre-approved at favorable rates and looking for property.

“A lot of homebuyers want to do something now before rates go up further,” said Kevin Hanson, executive vice president and director of lending for Gate City Bank.

The average rate for a 30-year fixed mortgage rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987, Freddie Mac said in a statement. The rate was the highest since July 2011 and above 4 percent for the first time since March 2012.

The increase, sparked by expectations that the Federal Reserve will scale back bond purchases, provides a test for a yearlong housing recovery that’s been fueled by home-loan costs near record lows.

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