30-year mortgage rate tops 5%

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The average interest rate on a 30-year fixed rate mortgage is above 5% for the first time since Halloween.

The average 30-year rate this week was 5.05%, up from 4.94% last week, mortgage finance giant Freddie Mac said today. The last time the average rate was above 5% was on Oct. 29, when it was at 5.03%.


The rise in rates comes as yields on Treasury debt have surged in the face of declining investor demand. The yield on the 10-year Treasury note, the benchmark for mortgage rates, closed at 3.8% today, up from 3.75% on Wednesday and well above its Nov. 30 level of 3.2%.

Mortgage rates, meanwhile, are up from the record low of 4.71% reached on Dec. 3. Some analysts worry that the rise in rates could put the brakes on a housing rebound. Mortgage applications fell 12% last week.

Freddie Mac, however, said the rise in rates should be viewed in context.

‘Although interest rates for 30-year fixed-rate mortgages are above 5% this week for the first time since the end of October, they are still around 0.5 percentage points below this year’s peak set in mid-June,” said Frank Nothaft, Freddie Mac vice president and chief economist.

And rates are still below year-ago levels. Last year at this time, the 30-year fixed-rate mortgage averaged 5.14%.

Among other rates:

The 15-year fixed-rate mortgage averaged 4.45%, up from last week, when it averaged 4.38%. A year ago at this time, the 15-year FRM averaged 4.91%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.4%, up from 4.37% last week. A year ago, the five-year ARM averaged 5.49%.

The one-year Treasury-indexed ARM averaged 4.38%, up from 4.34% last week. At this time last year, the one-year ARM averaged 4.95%.

The rates don’t include the extra fees known as points.

-- Martin Zimmerman

redit: Tim Rue / Bloomberg News