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Mortgage rates leapt higher this week, rising to their highest level in four months.

Home loan rates had already begun their ascent before the Federal Reserve announced Wednesday that it was not raising its benchmark rate but was leaving open the possibility of a hike next month. The news came too late in the week to be factored into Freddie Mac’s survey. The government-backed mortgage-backer aggregates current rates from 125 lenders from the across the country weekly to come up with national average mortgage rates.

Even with the Fed holding steady on rates, many observers believe the skittishness of the financial markets has more to do with the presidential election than any action the central bank takes. It is likely that mortgage rates upward trajectory will stall until after Tuesday’s outcome.


Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed believe rates will remain unchanged in the coming week, rising no more than plus or minus two basis points. (A basis point is 0.01 percentage point.)

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average jumped to 3.54 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.47 percent a week ago and 3.87 percent a year ago. This is just the third time since June the 30-year fixed rate has been at or above 3.5 percent.

The 15-year fixed-rate average climbed to 2.84 percent with an average 0.5 point. It was 2.78 percent a week ago and 3.09 percent a year ago.

The five-year adjustable rate average rose to 2.87 percent with an average 0.4 point. It was 2.84 percent a week ago and 2.96 percent a year ago.

“A jump last week in the PCE — the price index tracked most closely by the Fed — raised the prospect that inflation might not be completely dead after all,” Sean Becketti, Freddie Mac chief economist, said in a statement. “Investors reacted by driving the yield on the 10-year Treasury to its highest point since June. The 30-year mortgage rate jumped seven basis points to 3.54 percent, the largest one-week increase in over six months.”

Meanwhile, as rates increased, mortgage applications declined this week, according to the latest data from the Mortgage Bankers Association.

The market composite index — a measure of total loan application volume — fell 1.2 percent from the previous week. The refinance index dropped 2 percent, while the purchase index decreased 0.4 percent. The refinance share of mortgage activity accounted for 62.7 percent of all applications.

“U.S. rates are being pushed up as investors around the globe anticipate less aggressive policies from central banks, including the Federal Reserve,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. “The Fed kept rates steady following their November meeting, but clearly signaled that they are ready to move next month.  Noting that ‘the case for an increase in the federal funds rate has continued to strengthen’, the FOMC is giving markets notice that a rate hike is pending absent a significant weakening in the job market or a sharp downturn in inflation. Although the committee decided not to hike rates this month, likely reflecting a desire to not move immediately before the election, two members dissented, indicating that they see greater risks from keeping rates too low for too long. We continue to forecast that mortgage rates will rise over the next year, ending 2017 closer to 4.5 percent.”