Mortgage rates jump back above 5%, Freddie Mac reports
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The typical interest rate on 30-year fixed-rate mortgages has jumped back above 5%, Freddie Mac said Thursday in its weekly survey.
The increase, from 4.99% last week to 5.08% this week, left fixed rates at their highest level since the first week of this year, Freddie Mac economist Frank Nothaft said.
Reflecting concerns that inflation may reemerge because the economy is showing signs of recovery, long-term interest rates have been moving higher. The yield on a 10-year Treasury note, a benchmark for fixed mortgages rates, was at 3.87% Thursday morning, compared with 2.66% a year earlier.
Rates also have been nudged higher by the end on Wednesday of a Federal Reserve program to purchase $1.25 trillion in mortgage-backed bonds issued by Fannie Mae, Freddie Mac and other government-sponsored agencies.
In compiling its survey, Freddie Mac asks lenders to provide a popular combination of rates and origination charges that they are offering borrowers who have good credit and a 20% down payment or equity in their home. In this week’s survey, the upfront charges on a 30-year fixed loan averaged 0.7% of the amount of the mortgage.
The deep recession and tight lending standards have made it difficult for many people to qualify for such loans. But well-qualified borrowers often can negotiate slightly better rates than those in the Freddie Mac survey, mortgage experts say.
Freddie Mac said the average interest rate on a 15-year fixed mortgage averaged 4.39% this week with 0.6% in lender charges, compared with 4.34% last week.
So-called 5-year hybrid mortgages, which are pegged to rates on Treasury bonds and become adjustable after five years at a fixed rate, had an average start rate of 4.10% this week with 0.6% in upfront charges. That was down from 4.14% a week earlier.
The 1-year Treasury-indexed adjustable-rate mortgage averaged 4.05% this week with an average 0.6% in lender charges. A week earlier it had averaged 4.20%, Freddie Mac said.
-- E. Scott Reckard