Mortgage rates highest since 2016

Mortgage rates continued their ascent this week, their fifth consecutive increase.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average shot up to 4.32 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.22 percent a week ago and 4.17 percent a year ago. The 30-year fixed rate has risen about 40 basis points (a basis point is 0.01 percentage point) since the start of the year and hasn’t been this high since December 2016.

The 15-year fixed-rate average jumped to 3.77 percent with an average 0.5 point. It was 3.68 percent a week ago and 3.39 percent a year ago.

The five-year adjustable rate average rose to 3.57 percent with an average 0.4 point. It was 3.53 percent a week ago and 3.21 percent a year ago.

“Mortgage rates moved sharply higher last week, spurred by a selloff in the stock market and further evidence of a strong economy that will soon force the world’s major central banks to push interest rates higher,” Aaron Terrazas, senior economist at Zillow, said in a statement. “This week political uncertainty should wane as Congressional negotiators have agreed to a two-year budget, but financial market volatility could continue. Short-term market fluctuations aside, the trend in rates is clearly upward after spending years near historic lows.”

Mortgage rates tend to follow the same path as long-term bond yields, which have been steadily climbing. The yield on the 10-year Treasury has climbed about 40 basis points since the start of the year on fears of escalating inflation and concerns about Federal Reserve rate hikes.

Bankrate.com, which puts out a weekly mortgage rate trend index, found that most of the experts it surveyed say rates will continue to move higher in the coming week. Michael Becker, branch manager of Sierra Pacific Mortgage, is one who predicts rates will go up.

“The sell-off in equity markets provided a quick dip in mortgages rates,” Becker said. “But with the sell-off behind us, it looks like markets are once again focusing on the stimulative aspects of the tax cuts and the potential for inflation to rise. This will help push up mortgage rates in the coming week.”

Meanwhile, mortgage applications were flat last week, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — ticked up 0.7 percent from a week earlier. The refinance index rose 1 percent, while the purchase index was unchanged from a week ago.

The refinance share of mortgage activity accounted for 46.4 percent of all applications, falling to its lowest level since July.