Average rate for 30-year mortgages back above 5%
The average interest rate offered on 30-year fixed-rate mortgages has jumped back above 5%, Freddie Mac said Thursday.
The increase to 5.08% from 4.99% last week put the average at its 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 mortgages rates, was at 3.87% on Thursday, compared with 2.66% a year earlier.
Rates may also have been nudged higher by the phasing out 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. The Fed stopped its bond-buying program Wednesday.
Freddie Mac’s weekly survey asks lenders to provide a popular combination of rates and origination charges that they are offering borrowers who have good credit and at least a 20% down payment or that much equity in their home.
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 better rates than those in the Freddie Mac survey, experts say.
In this week’s survey, the upfront charges on a 30-year fixed-rate loan averaged 0.7% of the amount of the mortgage.
Freddie Mac said the average interest rate on a 15-year fixed mortgage averaged 4.39% this week with 0.6% in upfront 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 4.1% this week with 0.6% in upfront charges. That was down from 4.14% a week earlier.
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