By Kathy Orton The Washington Post
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 4.6 percent with an average 0.4 point, its highest level in nearly two months. Points, fees paid to a lender, are equal to 1 percent of the loan amount.
It was 4.54 percent a week ago and 3.93 percent a year ago.
The 15-year fixed-rate average grew to 4.08 percent with an average 0.4 point. It was 4.02 percent a week ago and 3.18 percent a year ago. The five-year adjustable rate average rose to 3.93 percent with an average 0.2 point. It was 3.87 percent a week ago and 3.15 percent a year ago.
When the Federal Reserve met earlier this week, it did not raise interest rates, but it did signal a September hike is likely.
The central bank raised its benchmark rate twice this year and indicated two more increases are possible before the end of the year.
The Fed doesn’t set mortgage rates, but its decisions influence them. A better indicator of where rates are headed is the movement of long-term bonds. This week, the yield on the 10-year Treasury crossed the 3 percent threshold.
It hadn’t closed at 3 percent since late May. When yields rise, so do home loan rates.
Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly half the experts it surveyed say rates will move higher in the coming week.
Meanwhile, mortgage applications declined for the third week in a row, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — decreased 2.6 percent from a week earlier.
The refinance index fell 2 percent, while the purchase index dropped 3 percent.
The refinance share of mortgage activity accounted for 37.1 percent of all applications.
“The purchase index was at its lowest level in a month as low housing inventory and rising home prices continue to be an issue,” said David Stevens, MBA president.