The cost of borrowing to buy a home is stabilizing. Freddie Mac reported today that the average rate on a conventional 30-year fixed-rate mortgage increased by a comparatively reasonable eight basis points this week to 4.39%.
The move comes a day after the Federal Reserve announced it will be continuing its bond-buying program known as QE3 for at least another month. "The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability," the central bank said in a press release yesterday.
While a better-than-expected private sector jobs report is also fueling optimism in the market today, shares of the nation's largest homebuilders are up, at least in part, on the news from the mortgage sector. D.R. Horton (DHI +1.14%), PulteGroup (PHM +2.50%), and Lennar (LEN +1.13%), the nation's three largest builders, are all up by more than 1% in afternoon trading.
And seemingly for the same reason, mortgage lenders like Wells Fargo (WFC +2.19%) and Bank of America (BAC +0.73%) are also staging an impressive rally, up 2.2% and 1.6%, respectively.
