Fixed mortgage rates edged higher this week, with Freddie Mac reporting that lenders were offering 30-year loans to solid borrowers at an average of 4.33%, up from 4.27% a week ago.
The average for a 15-year fixed loan rose from 3.33% to 3.39%, the McLean, Va.-based home finance company said Thursday. Start rates for variable-rate loans were unchanged.
Helped by stimulus measures from the Federal Reserve, the 30-year rate dropped below 3.5% in late 2012, but as recovery set in it rose back above 4.5% by the middle of last year.
It has spent most of 2014 below that level, making mortgage borrowing quite a bargain by historical standards.
Most fixed mortgages are packaged up to back bonds that are sold to investors with payment guarantees from Freddie Mac and other government-controlled entities.
These so-called agency bonds are regarded as nearly as safe as securities issued by the federal government, and fixed mortgage rates tend to move up or down according to what investors can earn on 10-year Treasury notes.
The mortgage rate increase this week followed an uptick in the yield on 10-year Treasury notes late last week,said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac surveys lenders every Monday through Wednesday, asking them about the terms they are offering to borrowers who are good credit risks, have 20% down payments and pay less than 1% of the loan amount in lender fees and discount points.