After falling for seven months, Freddie Mac yesterday said the average rate on a 30-year fixed mortgage increased to 4.83 percent, up from 4.61 reported last week. While rates hit a 40-year low of 4.17 percent last month, yesterday’s figures reflect five straight weeks of increasing fixed mortgage rates.
The average rate on the 15-year loan also grew to 4.17 percent, up significantly from 3.96 percent. The 15-year rate hit its lowest level in November on records dating back to 1991.
The average rate on a five-year adjustable mortgage increased to 3.77 percent from 3.60 percent; the five-year hit its lowest rate of 3.25 percent last month on records dating back to January 2005.
The average rate for one-year adjustable home loans slightly increased to 3.35 percent from 3.27 percent.
The increase is due to higher yields in long-term Treasurys as investors transfer money out of Treasurys and into stocks on expectations that the Congressional tax-cut plan will fuel growth and potentially higher inflation.
The increase in fixed mortgage rates is already taking its toll on the housing market. According to Mortgage Bankers Association, refinancing activity last week fell for the fifth-straight week as the number of people applying for a mortgage dropped 5 percent from the week prior.