Despite slight changes, mortgage rates remained near all-time lows in the week ending November 8, according to Freddie Mac.
The government-sponsored enterprise's Primary Mortgage Market Survey reported that 30-year fixed-rate mortgages averaged 3.4 percent, a slight increase from last week's average of 3.39 percent. A year ago at this time, they averaged 3.99 percent, which was the first time 30-year FRMs ever fell below 4 percent.
Additionally, 15-year FRMs dropped from 2.74 to 2.73 percent. Last year during this week, 15-year FRMs averaged 2.74 percent.
Keith Gumbinger, vice president at HSH.com, told Bloomberg that low mortgage rates have had a direct effect on home prices.
"There is absolutely a direct relationship between falling interest rates and rising prices," Gumbinger said. "More borrowers can come out and participate in markets that would have been considered too expensive for them."
With mortgage rates enticing more people to enter the market, demand increases. When demand is up, prices will go up as multiple bidders on homes will drive up the price a house sells for.