Mortgage rates increased to their highest level in four years according to the latest data from Freddie Mac’s [1] Primary Mortgage Market survey. According to the data, 30-year fixed-rate mortgage rates climbed for the third consecutive week to 4.58 percent from 4.47 percent last week climbing 11 basis points.
“Mortgage rates are now at their highest level since the week of August 22, 2013,” said Sam Khater, Chief Economist at Freddie Mac. “Higher treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news are behind the uptick in rates over the past week.”
The 15-year fixed-rate mortgage rates and the 5-year Treasury-indexed hybrid adjustable-rate mortgage also saw an uptick during the week rising to 4.02 percent and 3.74 percent respectively.
Data released by the Federal Housing Finance Agency [2] (FHFA) on Thursday indicated that mortgage rates saw a steady climb in March. According to FHFA’s Index which takes into account several indices of new mortgage contracts, interest rates on conventional purchase-money mortgages increased from February to March.
It indicated that while the national average contract mortgage rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was up from 4.28 percent to 4.49 percent for loans closed in late March, the average interest rate on all mortgage loans increased 18 basis points from 4.24 percent in February to 4.42 percent in March.
The average loan amount for all loans was $317,300 in March, up $5,400 from $311,900 in February, the FHFA data said.
How are these numbers likely to affect homebuyers this season? “Despite the increase in borrowing costs, demand for home purchase credit remains solid,” Khater said.
However, according to Danielle Hale, Chief Economist at Realtor.com [3], “Home shoppers who were waiting for more plentiful inventory in the spring are likely to feel a chill when thinking about how this increase hits their wallets. For a typically priced home, the 63 basis point increase in mortgage rates from early January to now means nearly an extra $1,000 per year in mortgage payments.”