Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan jumped to 4.58 percent, up from 4.40 percent last week. The average on the 15-year fixed loan rose to 3.60 percent from 3.44 percent. Both averages are the highest since July 2011.
Rates have risen more than a full percentage point since May. Last week’s spike comes after more Fed members signaled they could reduce the bond purchases as early as September. The purchases have helped keep long-term interest rates low, including mortgage rates.
Despite the hike, mortgage rates remain low by historical standards. Recent reports suggest the jump in rates has yet to sap the housing recovery’s momentum.
In July, previously occupied homes in the U.S. sold at the fastest pace since 2009. Sales jumped 6.5 percent last month to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors reported Wednesday. Over the past 12 months, sales have surged 17.2 percent.
The National Association of Home Builders said its measure of confidence among builders rose this month to its highest level in nearly eight years.
Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield has also surged on speculation that the Fed’s stimulus will slow. It rose to 2.90 percent Thursday morning, its highest level in two years.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through 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 30-year mortgage rose to 0.8 point from 0.7 point.
From The Detroit News: http://www.detroitnews.com/article/20130826/BIZ01/308260011#ixzz2d5CGZ0nE