30-Year Mortgage Rates Top 7% for First Time Since August

Interest rates on 30-year, fixed-rate mortgages shot above 7% for the first time since mid-August, the Federal Home Loan Mortgage Corp. said Thursday.

Economists said the increase to 7.11% from 6.86% last week probably signals at least a temporary end to the yearlong downward trend in long-term mortgage rates. However, they did not expect rates to increase much further.

This week’s increase marks the steepest one-week rise since August, 1989. Two weeks ago, rates hit a 25-year low of 6.74%, but they have been increasing along with signs the economy is improving, including increased home sales and strong auto sales. A year ago, the rate on 30-year mortgages averaged 8.29%.

On one-year, adjustable-rate mortgages, lenders were asking an average initial rate of 4.17%, down from 4.19% a week earlier.

Fifteen-year mortgages, an increasingly popular option for people refinancing mortgages, averaged 6.65% this week, up from 6.40% a week earlier and 6.31% two weeks earlier.