Real Estate Notes
Rates on 30-year mortgages continue to surge
Rates on fixed mortgages surged for the fifth straight week. Freddie Mac said Thursday the average rate on a 30-year fixed mortgage rose to 4.83 percent from 4.61 percent last week. In November, the rate was at a 40-year low of 4.17 percent.
The average rate on the 15-year loan also increased to 4.17 percent this week from 3.96 percent. It reached 3.57 percent in November, the lowest level on records dating from 1991.
The average rate on a five-year adjustable-rate mortgage rose to 3.77 percent from 3.60 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating to January 2005. The average rate on one-year adjustable-rate home loans edged up to 3.35 percent from 3.27 percent.
Rates are on the rise after falling for seven months. Investors are shifting money out of Treasurys and into stocks, largely on the expectation that the tax-cut plan before Congress will spur growth and potentially higher inflation.
Yields tend to rise on fears of higher inflation, and mortgage rates track the yields on the 10-year Treasury note.
"Market concerns over stronger economic growth that, in the near term, could lead to an increase in inflation have sparked a rise in bond yields and mortgage rates have followed," Frank Nothaft, vice president and chief economist of Freddie Mac, said in the statement.
Mortgage applications fell for a third straight week as rising borrowing costs discouraged purchases and refinancing, the Mortgage Bankers Association said Wednesday. The group's applications index declined 2.3 percent in the week ended Dec. 10. Purchase applications slid 5 percent, while the refinancing gauge decreased 0.7 percent.
Freddie Mac's rate averages do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for all mortgages in Freddie Mac's survey was 0.7 point.
- From news services