US Experiences 3.81 Percent Rise in 30-year Mortgage
Fixed-rate mortgages jumped to their highest levels in one year but remained low by historical standards.
The average rate for 30-year mortgages rose by 3.81 percent according to Freddie Mac. This was up from 3.59 percent just only last week.
A 2.98 percent increase was also reported on 15-year loans, a jump from last week’s 2.77 percent.
The reason why these rates are rising is mainly due to their tendency to follow the yield on the 10-year Treasury note. A 2.17 percent increase in the yield was reported on Tuesday but fell to 2.11 percent in Thursday.
Investors selling bonds are pushing the yields.
Due to the cheap mortgage rates, the housing market has seen tremendous growth. Buyers who can afford loans helped strengthen the housing recovery by buying properties. This drives up the price for homes causing sellers to gain advantage on their end.
Real estate reports revealed that sales of new and previously owned homes rose in April. The number of Americans who closed deals on their new homes reached its highest in three years.
Freddie Mac generally surveys lenders all across the country from Monday through Wednesday every week to come up with the calculation of the average mortgage rates. The rates don’t include the “points” that borrowers must pay to earn low rates.
These extra fees were also reported to have increased with 30-year mortgage fee increasing to 0.8 percent while 15-year loans remain unchanged.
One-year adjustable-rate mortgage rate, on the other hand, dipped to 2.54 percent from 2.55 percent. A 0.1 increase to 0.5 point from 0.4 was reported for one-year adjustable-rate loans.
Finally, a 0.03 percent increase to 2.66 percent from 2.63 percent was reported for five-year adjustable-rate mortgage.