According to Freddie Mac, mortgage rates are starting to tick upwards a little more. While rates are still extremely low, this past week did show that the average rate for the 30-year loan ticked up to 4.41 percent from 4.40 percent last week. The average for the 15-year mortgage increased to 3.47 percent from 3.42 percent. Since the record lows of a year ago mortgage rates have been on the move. So much so that they have risen a full percentage point. Despite the rise, mortgage rates still hover right near the historical lows we have seen for some time now.
A report released Tuesday by real estate data provider CoreLogic showed U.S. home prices rose in February from a year earlier at a solid pace, suggesting that a tight supply of available homes is boosting prices despite slowing sales. Most economists expect home sales to rebound as the weather improves and the spring buying season begins.
The increase in mortgage rates over the year was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low. Indeed, the Fed has announced three $10 billion declines in its monthly bond purchases since December. The latest plan is to cut its monthly long-term bond purchases to $55 billion because it thinks the economy is steadily healing.
Federal Reserve Chair Janet Yellen made clear this week that she thinks the still-subpar U.S. job market will continue to need the help of low interest rates “for some time.” Her remarks signaled that even after the Fed phases out its monthly bond purchases, it has no plans to raise a key short-term rate anytime soon.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
- The average fee for a 30-year mortgage rose to 0.7 point from 0.6 point. The fee for a 15-year loan was unchanged at 0.6 point.
- The average rate on a one-year adjustable-rate mortgage edged up to 2.45 percent from 2.44 percent. The average fee held steady at 0.4 point.
- The average rate on a five-year adjustable mortgage increased to 3.12 percent from 3.10 percent. The fee remained at 0.5 point.
*The original source for this article was the Associated Press.