The Atlanta Journal-Constitution
Mortgage rates soar to highest level since 2011
Five consecutive weeks of increases pushed mortgage rates to their highest level since April 2011.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.72 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.65 percent a week ago and 3.83 percent a year ago.
The 15-year fixed-rate average jumped to 4.16 percent with an average 0.5 point. It was 4.11 percent a week ago and 3.13 percent a year ago. The five-year adjustable rate average rose to 3.97 percent with an average 0.3 point. It was 3.92 percent a week ago and 3.20 percent a year ago.
“The robust economy, rising Treasury yields and the anticipation of more short-term rate hikes caused mortgage rates to move up,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Although the Federal Reserve raised its benchmark rate Wednesday, the news came too late in the week to be factored into Freddie Mac’s survey. Freddie Mac, the government-allied mortgage-backer, aggregates rates weekly from 125 lenders from across the country to compile national average mortgage rates.
The Fed doesn’t set mortgage rates, but its decisions influence them. Home-loan rates are affected by several factors, including the expectations of investors. Good economic news tends to be bad for rates because a strong economy can lead to worries about inflation.
Inflation causes certain investments such as bonds to lose value. That’s why the movement of longterm bonds is a better predictor of where mortgage rates are headed than the actions of the central bank.
The yield on the 10-year Treasury climbed above 3 percent last week and has remained above that threshold. It peaked at 3.10 percent Tuesday before closing at 3.05 on Thursday.