30-year mort­gage rates rise to 4.30%

The loan rate is the high­est it has been since April 2014.

The Denver Post - - BUSINESS - By Paul Wise­man

wash­ing­ton» Longterm U.S. mort­gage rates climbed again this week, hit­ting the high­est lev­els since 2014.

Mort­gage gi­ant Fred­die Mac said Thurs­day that the rate on 30-year fixed-rate loans jumped to an av­er­age 4.30 per­cent from 4.16 per­cent last week and the high­est since April 2014. The av­er­age for a 15-year mort­gage rose to 3.52 per­cent from 3.37 per­cent last week and high­est since Jan­uary 2014.

Rates on ad­justable fiveyear mort­gages shot up this week to 3.41 per­cent, high­est since mid-2011.

Rates have surged since the Nov. 8 elec­tion of Don­ald Trump. In­vestors have bid rates higher be­cause they be­lieve the pres­i­den­t­elect’s plans for tax cuts and higher in­fras­truc­ture spend­ing will drive up eco­nomic growth and inflation.

And last week, the Fed­eral Re­serve, cit­ing im­prove­ment in the U.S. econ­omy, raised short-term U.S. in­ter­est rates for only the sec­ond time in a decade. “The mort­gage in­dus­try di­gested the Fed’s de­ci­sion, and this week’s sur­vey re­flects that re­sponse,” said Sean Beck­etti, Fred­die Mac’s chief econ­o­mist.

More peo­ple are at risk of be­ing priced out of the hous­ing mar­ket be­cause rates are rising at a time when there is a short­age of prop­er­ties for sale, driv­ing bids higher. The Na­tional As­so­ci­a­tion of Real­tors re­ported Wed­nes­day that fewer than 1.9 mil­lion homes were for sale in Novem­ber, down 9 per­cent from a year ago. The me­dian price of an ex­ist­ing home is up nearly 7 per­cent from a year ago, at $234,900.

The Real­tors pre­dict that higher rates and de­clin­ing af­ford­abil­ity in many parts of the coun­try likely will lead to only a small gain in sales of ex­ist­ing homes next year — a 2 per­cent in­crease to about 5.52 mil­lion.

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. One point equals 1 per­cent of the loan amount.

The av­er­age fee for a 30year mort­gage was un­changed this week at 0.5 point. The fee on 15-year loans also re­mained at 0.5 point.

The fee on ad­justable five-year loans stayed at 0.4 point.

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