WASHINGTON – Average U.S. rates for fixed mortgages rose this week to their highest levels in two years, driven by heightened speculation that the Federal Reserve will slow its bond purchases later this year.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan jumped to 4.58 percent, up from 4.40 percent last week. The average on the 15-year fixed loan rose to 3.60 percent, from 3.44 percent. Both averages are the highest since July 2011.
Rates have risen by more than a full percentage point since May. Last week’s spike comes after more Fed members signaled they could be open to reducing the bond purchases as early as September. The purchases have helped keep long-term interest rates low, including mortgage rates.
Despite the increase, mortgage rates remain low by historical standards. And recent reports suggest the jump in rates has yet to sap the housing recovery’s momentum.
In July, previously occupied homes in the United States sold at the fastest pace since 2009. Sales jumped by 6.5 percent last month to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors reported this week. Over the last 12 months, sales have surged by 17.2 percent. Last week, the National Association of Home Builders said its measure of confidence among builders rose this month to its highest level in nearly eight years.
Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent.
The average rate on a one-year adjustable-rate mortgage stayed at 2.67 percent. The average rate on a five-year adjustable mortgage declined to 3.21 percent, from 3.23 percent.