US Mortgage Rates Jump This Week
WASHINGTON (AP) — Long-term U.S. mortgage rates jumped this week after two straight weeks of declines, reaching their second-highest level this year.
Against a backdrop of rising interest rates in the economy, long-term loan rates have been running at their highest levels in seven years. And the Federal Reserve on Wednesday raised its benchmark interest rate for the second time this year and signaled that it may step up its pace of rate increases.
Mortgage buyer Freddie Mac said Thursday the average rate on 30-year, fixed-rate mortgages was 4.62 percent, up from 4.54 percent last week. By contrast, the 30-year rate averaged 3.91 percent a year ago.
The average rate on 15-year, fixed-rate loans increased to 4.07 percent from 4.01 percent last week.
The average 30-year mortgage rate reached a high this year of 4.66 percent on May 24; the 15-year rate hit 4.15 percent that day.
Freddie Mac chief economist Sam Khater said the impact on consumers of the Fed's rate hike will be smaller than in its rounds of rate increases in past years. He noted that a much smaller portion of mortgage loans now are tied to changes in short-term interest rates — adjustable-rate mortgages now account for only 8 percent of loans, as opposed to 31 percent in 2004-06.
"Still, inflation continues to firm and borrowing costs are inching higher," Khater said.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.
The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. The average fee on 30-year fixed-rate mortgages fell to 0.4 point from 0.5 point last week.
The fee on 15-year mortgages was unchanged at 0.4 point.
The average rate for five-year adjustable-rate mortgages jumped to 3.83 percent from 3.74 percent last week. The fee declined to 0.3 point from 0.4 point.