Higher mortgage rates set stage for lower home sales

By ALEX VEIGA
AP Business Writer

LOS ANGELES (AP) — A run-up in mortgage rates in recent weeks is threatening to pump the brakes on the housing market as the increased borrowing costs reduce would-be buyers’ purchasing power. The average weekly rate on the benchmark 30-year mortgage has risen swiftly since the first week of this year, when it stood at 3.2%. This week it rose to 5.11%, according to mortgage buyer Freddie Mac. While higher rates could translate into less frenzied competition for homes, most homeowners with a mortgage have locked in ultra-low rates over the years and will have less financial incentive to sell, which could make the inventory crunch even worse.