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KIRO Radio's Tom Kelly digs deep into the Puget Sound real estate market

Real Estate

Existing home sales leap; loan rates remain low

Average rates on fixed-rate mortgages rose this week but remained near record lows, a trend that is leading more Americans to buy homes or refinance their loans.

Mortgage buyer Freddie Mac reported that the average rate on a 30-year loan increased to 3.37 percent from 3.32 percent last week. That's just above the 3.31 percent rate of a month ago, the lowest on records dating to 1971.

The average on the 15-year fixed mortgage dipped to 2.65 percent from 2.66 percent last week. The record low is 2.63 percent.

Low rates have spurred home sales and helped spark a modest housing recovery. They have also led more people to refinance, which typically lowers monthly mortgage payments and boosts consumer spending.

In a separate report, the National Association of Realtors said sales of previously occupied homes jumped in November. Last month's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred purchases. Excluding that month, November's sales were the highest since July 2007.

Sales are up 14.5 percent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.

Job growth and low home-loan rates have helped drive purchases. Home values are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. More people may also put their homes on the market if they feel confident they can sell at a good price.

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