U.S. mortgage rates climb to highest in 7 years

WASHINGTON — Longterm U.S. mortgage rates leaped this week to their highest levels in seven years amid global anxiety over rising interest rates that has gripped financial markets.

Costs for would-be homebuyers are climbing. Mortgage buyer Freddie Mac said yesterday the rate on 30-year, fixed-rate mortgages jumped to an average 4.90 percent this week from 4.71 percent last week. That’s the highest level for the benchmark rate since April 2011. A year ago, it stood at 3.91 percent.

The average rate on 15year, fixed-rate loans rose to 4.29 percent this week from 4.15 percent last week.

The Federal Reserve recently signaled its confidence in the economy by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end.

It was the central bank’s third increase in short-term interest rates this year, with one more expected before year’s end. Strong economic data and a positive outlook from Fed officials have spurred a sell-off in U.S. Treasury bonds, especially longer-term bonds, stoking concerns over even higher interest rates.

As anxiety over higher rates spiraled, financial markets around the world suffered a massive sell-off. U.S. stocks marked their biggest drop since February on Wednesday, as the Dow Jones industrial average slid 831 points. Stocks sank again on Wall Street yesterday.

President Trump stepped in to assert that the Fed “is making a mistake” with its rate increases and accused the central bank of having “gone crazy.”