Average U.S. rates on fixed mortgages rose this week but remained near record lows, keeping home buying more affordable.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed loan increased to 3.42 percent from 3.38 percent last week. That's still near the 3.31 percent rate reached in November, the lowest in records dating to 1971.
The average on the 15-year fixed mortgage increased to 2.71 percent from 2.66 percent last week. The record low is 2.63 percent.
The rate on the 30-year fixed mortgage averaged 3.66 percent in 2012, the lowest annual average in 65 years.
Low mortgage rates are a key reason the housing market began to recover last year, and many economists predict 2013 could be an even stronger year.
Total home sales last year increased to 4.65 million, the most since 2007. And home prices are steadily increasing, which makes consumers feel wealthier and more likely to spend.
Another reason for the housing rebound is that there aren't enough houses for sale. A limited supply has created demand for new construction, which has made builders more confident.
Lower mortgage rates also have persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money to meet larger down payment requirements.