Fixed mortgage rates jumped again this week, with Freddie Mac's widely watched survey saying lenders were offering 30-year home loans at an average of 4.58%.
That was up from 4.4% last week and the highest rate Freddie has reported in two years.
Freddie Mac reported Thursday that the average for the 15-year fixed loan, a popular alternative for people refinancing mortgages, was 3.6%, up from 3.44% last week and 2.89% at this time a year ago.
The higher rates have sharply reduced the number of borrowers able to refinance their home loans at lower rates, and with delinquencies and foreclosures also on the wane, big mortgage lenders are cutting back on staffing.
Wells Fargo, the No. 1 home lender, told 2,300 mortgage workers Wednesday that their jobs would be eliminated in 60 days, saying demand for refinancings was much lower than last year and earlier this year.
The impact in the greater Los Angeles area will be 393 employees, most at locations in Orange County and the rest in San Bernardino. An additional 69 employees in San Diego are being handed pink slips, a Wells Fargo spokesman said.
JPMorgan Chase & Co., the No. 2 mortgage lender, said two weeks ago that it would eliminate 3,000 mortgage-related jobs.
Chase and Wells Fargo said they were trying to find jobs elsewhere in their operations for the employees losing jobs.Mortgage rates are rising on expectations by investors that the Federal Reserve would start cutting back on its stimulus program later this year. The Fed has been buying $85 billion a month in Treasury bonds and mortgage-backed securities, creating a demand that has kept interest rates low.
Minutes of the Fed's last policy meeting at the end of July, released Wednesday, revealed that central bank officials still had reached no consensus on when to scale back the bond purchases, but analysts expect the first cut will come in September.
Fixed mortgage rates generally take their cues from the yield on the 10-year Treasury note, which bottomed out in late July at about 1.4%. A sharp increase that began late last week has continued, with the yield jumping to 2.9% Thursday morning.
Experts say the rising rates have caused some fence-sitting potential homebuyers to jump into the housing market before rates rise still higher. However, the increased demand for purchase mortgages has not compensated for a sharp decline in refinancings as the rates go up.