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Fixed mortgage rates keep rising — with no end in sight

(Pablo Martinez Monsivais/AP)

Fixed mortgage rates continued their upward march this week.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.43 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.40 percent a week ago and 4.10 percent a year ago.

The 15-year fixed-rate average rose to 3.90 percent with an average 0.5 point. It was 3.85 percent a week ago and 3.32 percent a year ago. The five-year adjustable rate average slipped to 3.62 percent with an average 0.4 point. It was 3.65 percent a week ago and 3.14 percent a year ago.

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Federal Reserve Chairman Jerome H. Powell appeared before Congress this week, painting an optimistic picture of the U.S. economy. He reiterated that the central bank will continue to raise interest rates at a slow and steady pace. Most observers expect the next increase to come later this month.

“The new Fed Chairperson Jerome H. Powell’s first testimony to the Congress was more bullish than expected,” said Shashank Shekhar, chief executive of Arcus Lending. “He was very upbeat about the economy and concerned about the rising inflation, both of which will trigger more Fed rate hikes this year.”

Although the Fed doesn’t set mortgage rates, its decisions influence them. Investor expectations tend to have a greater effect on home loan rates. Good economic news tends to be bad for mortgage rates because a strong economy raises fears about inflation.

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Higher mortgage rates combined with rising home prices and the loss of tax breaks for some homeowners are having a damping effect on the housing market. New-home sales and pending home sales slumped in January.

It doesn’t appear mortgage rates’ ascent will soon abate., which puts out a weekly mortgage rate trend index, found almost half of the experts it surveyed say rates will rise in the coming week.

“Until inflation concerns subside, there will be an upward bias to bond yields and mortgage rates,” said Greg McBride, chief financial analyst at

Meanwhile, mortgage applications picked up last week, according to the latest data from the Mortgage Bankers Association (MBA). The market composite index — a measure of total loan application volume — increased 2.7 percent from a week earlier. The refinance index slipped 1 percent, while the purchase index grew 6 percent.

The refinance share of mortgage activity accounted for 41.8 percent of all applications.

“After accounting for the [Presidents’ Day] holiday, purchase applications increased 6 percent last week, while refinance activity decreased over 1 percent,” said Joel Kan, an MBA economist. “The refinance share of all applications dropped to 41.8 percent, its lowest share since May 2017 as we move further into a purchase-dominated market.”

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