Mortgage interest rates fall for second consecutive week

Mortgage rates moved lower again last week, only the second time this year that rates have fallen in back-to-back weeks.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.54 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.56 percent the week before and 3.89 percent a year ago.

The 15-year fixed-rate average fell to 4.01 percent with an average 0.4 point. It was 4.06 percent the week before and 3.16 percent a year ago. The five-year adjustable rate average dropped to 3.74 percent with an average 0.4 point. It was 3.8 percent the week before and 3.11 percent a year ago.

The hangover from global events surrounding Spain and Italy lingered, which moderated mortgage rates. But the pause could be short-lived. Indications are that rates will resume their upward march after the Fed meets this week. The central bank is expected to raise its benchmark rate.

Long-term bond yields have begun to rise again. The yield on the 10-year Treasury — one of the most closely watched indicators for mortgage rates — rebounded to 2.97 percent Wednesday. It had sunk to 2.77 percent on May 29 after rising to a high of 3.11 percent on May 17. When yields go up, home loan rates also tend to rise.

Elizabeth Rose, sales manager at Nations Lending, is among those who predict higher rates.

“The European Central Bank has sparked some bearish concern with their inflation expectations …” Rose said. “Mortgage bonds have fallen below support levels and we could see some additional price volatility.”