Mortgage rates have soared to their highest levels in several months.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.99 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.94 percent a week ago and 4.32 percent a year ago.
After being stuck in a rut since October, the 30-year fixed rate rose to its highest point since mid-July. Nonetheless, it remains well below its historical average.
The 15-year fixed-rate average jumped to its highest level since mid-March, rising to 3.44 percent with an average 0.5 point. It was 3.38 percent a week ago and 3.55 percent a year ago. The five-year adjustable rate average grew to 3.47 percent with an average 0.3 point. It was 3.39 percent a week ago and 3.30 percent a year ago. The five-year ARM hasn’t been this high since May 2011.
The passage of the tax bill has investors anticipating more economic growth and inflation. That sentiment is driving long-term bond yields lower and home loan rates higher. Mortgage rates tend to follow the same path as the 10-year Treasury. When yields rise, home loan rates usually move higher.
“There is little major economic news on the schedule for this week to impact rates, with markets and lenders mostly quiet between the Christmas and New Year’s holidays,” said Aaron Terrazas, a senior economist at Zillow. “Despite three interest rates hikes by the Federal Reserve over the past year, mortgage rates are ending 2017 about 20 basis points below where they ended 2016 — largely driven by a flattening yield curve. It’s unlikely that this pattern can last long into 2018.”
The Mortgage Bankers Association did not release data on mortgage applications this week because of the holidays.