Mortgage rates hit 9-month high after rising for 6 weeks

Six weeks of increases have put the 30-year fixedrate average at its highest level in nine months.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average jumped to 3.17 percent with an average 0.7 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 3.09 percent a week ago and 3.5 percent a year ago. The 30-year fixedrate average hasn’t been this high since June.

Freddie Mac, the federally chartered mortgage investor, aggregates rates from around 80 lenders across the country to come up with weekly national average mortgage rates. It uses rates for high-quality borrowers with strong credit scores and large down payments. Because of the criteria, these rates are not available to every borrower.

The survey is based on home purchase mortgages, which means rates for refinances may be higher. The price adjustment for refinance transactions that went into effect in December is adding to the cost. The adjustment, which applies to all Fannie Mae and Freddie Mac refinances, is 0.5 percent of the loan amount. That works out to $1,500 on a $300,000 loan.

The 15-year fixed-rate average rose to 2.45 percent with an average 0.6 point. It was 2.4 percent a week ago and 2.92 percent a year ago. The five-year adjustable rate average climbed to 2.84 percent with an average 0.2 point. It was 2.79 percent a week ago and 3.34 percent a year ago.

“Moving forward, the general uptrend in mortgage rates is expected to resume as economic growth draws investors into stocks and out of bonds,” said Danielle Hale, Realtor.com’s chief economist.

Mortgage rates are being driven higher by the growing strength of the recovery and concerns that recovery will bring inflation. As inflation fears become more persistent, investors sell long-term assets causing yields and mortgage rates to rise.

“March has been a bit of a wild ride,” said James Sahnger, mortgage planner at C2 Financial.

Gordon Miller of the Miller Lending Group in Cary, N.C., said he expects rates to fall in the coming week.

“Rates may ease lower over the course of the week as the rebalancing of firstquarter portfolios for pension funds is necessary due to the run-up in stocks and the bond market,” he said. “With heavy purchasing of Treasurys, the 10-year note should improve and in turn push rates down slightly.”

Meanwhile, mortgage applications pulled back again last week. According to data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — decreased 2.5 percent from a week earlier. Although the purchase index grew 3 percent from the previous week, the refinance index fell 5 percent. The refinance share of mortgage activity accounted for 60.9 percent of applications.