A home-sale sign outside a house in Miami. (Joe Raedle / Getty Images )
Mortgage rates shot sharply higher this week in reaction to the improving economy, with Freddie Mac’s survey reporting that the average for a 30-year fixed loan rose from 3.59% last week to 3.81% -- the highest in more than a year.
The survey, out Thursday, showed the typical rate that lenders were offering on a 15-year fixed home loan jumped to 2.98% early this week, from 2.77% last week.
The home-loan rates tend to track the yield on Treasury bonds, which have jumped on expectations that the Federal Reserve may begin reining in its easy-money policies sooner rather than later. The yield on the 10-year Treasury note closed Wednesday at 2.12% -- half a percentage point higher than six months ago.
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Rising rates also are reducing demand for refinance loans. A Mortgage Bankers Assn. report Wednesday said applications for home loans had fallen for three straight weeks.
“Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases" of Treasury and mortgage securities, said Mike Fratantoni, the trade group’s vice president of research.
For borrowers purchasing homes, the mortgage rates remain extraordinarily low by historic standards. The typical rate exceeded 16% in 1981 and 1982, Freddie Mac’s records show, and the annual average topped 8% as recently as 2000.
The surveys asks lenders what terms they are offering to borrowers with solid credit histories, 20% down payments or home equity and sufficient documented income to repay the loans.
In the latest survey, borrowers would have paid 0.8% of the loan balance in upfront lender fees to obtain the 30-year mortgage and 0.7% of the loan amount on the 15-year loan, Freddie Mac said.
US 30 Year Mortgage Rate data by YCharts
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