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Freddie Mac: Mortgage rates higher, 30-year fixed averages 3.59%

May 23, 2013|By E. Scott Reckard

Mortgage rates have risen for the third week in a row, with Freddie Mac's survey of lenders pegging the average 30-year fixed-rate home loan at 3.59%, up from 3.51% last week.

Fixed-rate 15-year mortgages -- popular during a recent boom in homeowners refinancing their mortgages -- averaged 2.77%, up from 2.69%, Freddie Mac said Thursday.

Borrowers would have paid lenders 0.7% of the loan amount on average to obtain the rates, according to the survey, which asks lenders about the terms they are offering to rock-solid borrowers.

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Mortgage rates have risen about a quarter of a percentage point above last fall’s record lows, which "may slow some of the refinance momentum," said Frank Nothaft, Freddie Mac’s chief economist.

“Rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks,” Nothaft said in a news release.

The yield on the 10-year Treasury note, a benchmark for mortgage rates, closed above 2% Wednesday for the first time since March 15.

The increase came in reaction to the release of minutes from an April 30-May 1 Federal Reserve meeting on interest-rate policy.

The notes showed some Fed officials were willing to start cutting back on a bond-buying program as early as June if the economic recovery strengthens.

The program involves buying $85 billion per month in Treasury bonds and mortgage-backed securities to keep rates low as a stimulus to the economy.

In testimony to Congress on Wednesday, Fed Chairman Ben Bernanke said the central bank will continue the stimulus until the outlook for the labor market improves “substantially."

But pressed for more specifics, Bernanke didn't rule out cutting back on bond purchases by the end of the summer.

US 30 Year Mortgage Rate Chart

U.S. 30-year mortgage rate data by YCharts

ALSO:

New home sales climb

Low rates spur 15-year mortgage borrowing

Some Fed officials open to cutting stimulus by June

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