U.S. mortgage rates rose above 4 percent for the first time since October, following increases in bond yields, Freddie Mac reported Thursday in its weekly survey.
The 30-year, fixed-rate mortgage surged to 4.08 percent, up from 3.92 percent in the previous week, to its highest level in about five months. The rate was 4.81 percent a year ago.
Mortgage rates are catching up with increases in U.S. Treasury bond yields, said Frank Nothaft, chief economist at Freddie Mac.
Rates on 15-year, fixed mortgages rose to 3.3 percent from 3.16 percent in the week ending March 15. At this time last year the average 15-year rate was 4.04 percent.
Freddie Mac also reported that five-year, Treasury-indexed hybrid adjustable-rate mortgages edged up to 2.96 percent from 2.83 percent. That compares with 3.62 percent in the year-earlier period.
Bond yields rose have risen over the past two weeks on a positive assessment from the Federal Reserve, a relatively successful stress test of U.S.-based commercial banks and some clarity about Greece's sovereign-debt crisis. Employment is also improving and homeowners have reduced their debt-to-income ratio to the lowest point since the second quarter of 1994, according to the Fed.
The economic improvements have led to an increase in mortgage rates, allowing lenders to make more from loans. But it's bad news for homeowners, many of whom are already finding it difficult to qualify for mortgages as lending standards have gotten stricter. Sales of existing homes disappointed in February, falling to an annual rate of 4.59 million.