All the talk of tapering has caused mortgage rates to jump again, during a week that saw a pronounced move higher in Treasury yields. The average 30-year fixed-rate mortgage rate rose to 4.58% in the past week, the highest level since July 2011, according to Freddie Mac‘s (FMCC) latest weekly Primary Mortgage Market Survey out this morning, and up from 4.40% each of the previous two weeks. The rate has spiked from 3.35% in early May, which had nearly matched the all-time low of 3.31% seen last November.
“Fixed mortgage rates continued to follow bond yields higher leading up to the August 21st release of the Federal Reserve monetary policy committee’s minutes for July,” said Frank Nothaft, Freddie Mac’s chief economist, in a statement. ”In its July 30th and 31st meetings, the committee members were broadly comfortable with a plan to start reducing its bond purchases later this year, although a few emphasized the importance of being patient. Meeting participants acknowledged mortgage rate increases might restrain housing market activity, but several members expressed confidence the housing recovery would be resilient in the face of higher rates.”
The average 15-year fixed-rate mortgage rate rose to 3.60% from 3.44%, a week earlier and from an all-time low 2.56% in early May.
A similar 30-year mortgage rate measured by the Mortgage Bankers Association‘s latest weekly survey rose to 4.68% from 4.56% a week earlier. That survey also showed mortgage applications dropped by 4.6% last week. (taken from Barrons.com)