Freddie Mac: 30-year mortgage rate 4.46%; highest since September

Good news for the economy translated into bad news this week for mortgage borrowers, who were being offered an interest rate of 4.46% for the typical 30-year fixed loan, the highest level since mid-September, according to Freddie Mac.

The rate, released in a report Thursday, contrasted with 4.29% in last week’s survey of lenders by Freddie Mac. A year ago the typical rate for a 30-year home loan was 3.34%, according to the widely watched survey.

Lenders across the country told Freddie Mac they were offering 15-year fixed home loans to solid borrowers at an average 3.47% early this week, up from 3.3% a week ago and 2.67% a year ago.

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The higher rates, if sustained, would further douse a major boom in refinancing by homeowners. They also could dampen demand for home purchases, particularly in places like Southern California that have seen large increases in home prices in the last two years.

That would increase pressure on mortgage lenders to continue cutting their staffs. Major banks already have laid off tens of thousands of employees in reaction to higher interest rates and declining numbers of distressed loans.

Better-than-expected reports on private job growth and new home sales contributed to the run-up in mortgage rates, Freddie Mac chief economist Frank Nothaft noted in Thursday’s report.

Good economic news raises the probability that the Federal Reserve will soon start reducing its enormous purchases of bonds. The program is designed to stimulate the economy by keeping long-term interest rates low.

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