Freddie Mac: Mortgage rates up this week; 30-year loan averages 4.39%
Fixed mortgage rates moved higher this week after two weeks of declines, with the widely watched Freddie Mac survey pegging the average rate for a 30-year home loan at 4.39%, up from 4.31% last week.
That makes five weeks in a row of readings well above 4%, as the market anticipates the eventual end of a Federal Reserve bond-buying program, an effort to keep long-term rates low.
The Fed said Wednesday it would continue on course for now, but it’s expected to start tapering off its purchases this year, which could put upward pressure on interest rates.
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Freddie Mac, which asks lenders early each week about the terms they are offering to solid mortgage borrowers, said the average rate for a 15-year fixed-rate home loan rose from 3.39% last week to 3.43%.
The start rate for a loan with a rate fixed for five years before becoming adjustable for 25 years edged up from an average of 3.16% to 3.18%.
Some lenders are promoting these so-called hybrid loans, along with 10-year fixed loans, as a way to get lower rates. But they have drawbacks – long-term uncertainty in the case of the hybrids and higher payments for the 10-year fixed, since borrowers must pay off the principal faster.
The rates, still far below historic levels, have helped to promote a remarkable rebound in the housing markets.The Standard & Poor’s/Case-Shiller index of 20 large U.S. cities rose 12.2% in May compared with a year earlier.
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