Rate on 30-Year Mortgage Hits 2-Year High at 4.51%

×
mortgages interest rates freddie mac home buying real estate federal reserve
Nam Y. Huh/AP
WASHINGTON -- The average U.S. rate on the 30-year fixed mortgage rose this week to 4.51 percent, a two-year high. Rates have been rising on expectations that the Federal Reserve will slow its bond purchases this year.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan jumped from 4.29 percent the previous week. Just two months ago, it was 3.35 percent - barely above the record low of 3.31 percent.

The average on the 15-year fixed mortgage rose to 3.53 percent from 3.39 percent last week. That's the highest since August 2011.

Chairman Ben Bernanke has said the Fed could slow its bond purchases this year if the economy strengthens. The purchases have kept rates low. The yield on the 10-year Treasury, which mortgage rates typically track, has been rising.


Even with the gains, mortgage rates remain low by historical standards. Low rates have helped fuel a housing recovery that is helping to drive economic growth this year.

The annual sales pace of previously occupied homes topped 5 million in May for the first time in 3 ½ years. And sales of new homes rose at the fastest pace in five years.

Greater demand, along with a tight supply of homes for sale, has pushed up home prices. It also has led to more home construction, which has created more jobs.

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 of the loan amount.
  • The average fee for a 30-year mortgage was 0.8 point this week, up from 0.7 point last week. The fee for a 15-year loan also rose to 0.8 point from 0.7 point.
  • The average rate on a one-year adjustable-rate mortgage was unchanged at 2.66 percent. The fee rose to 0.5 point from 0.4.
  • The average rate on a five-year adjustable mortgage rose to 3.26 percent from 3.10 percent. The fee was unchanged at 0.7 point.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

9 Comments

Filter by:
Faith Yakatate

Getting a reverse mortgage for my family is the most hardest but more wiser decision we made. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings. I got help from these people.

http://www.reversemortgagelendersdirect.com/reverse-mortgage-rates/
http://www.reversemortgagelendersdirect.com/washington-reverse-mortgage/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-loan/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-calculator/
http://www.reversemortgagelendersdirect.com/how-does-a-reverse-mortgage-work/

December 16 2013 at 2:57 AM Report abuse rate up rate down Reply
AL1PA

Big deal! Interest rates went up on homes and still historically low. When the market allowed people with bad credit and no down payments to purchase a home, what did you think was going to happen? Many of the people that lost homes were nothing more than glorified renters that should have never been allowed to purchase anything because of bad credit. Our government touted living the American dream, but changed the rules so that virtual deadbeats could buy a home and they went right back to their old ways and didn't pay. Back in the day, 6% interest rates were the norm and a 20% down payment was the norm as well. People then thought twice about not paying and losing their home because they had that 20% down which they lost. Under the rules that permitted deadbeats to buy, nothing down and the rest when you catch thema dnthe bubble burst. Government has no excuse for being involved in forcing banks to lend money to those that ought not be able to borrow a dime.

July 12 2013 at 1:59 AM Report abuse rate up rate down Reply
jakeylee38

"Greater demand, along with a tight supply of homes for sale, has pushed up home prices. It also has led to more home construction, which has created more jobs."? Where in the world is this going on at? Tight supply of homes? Fannie Mae alone has 190 for sale in my county, and is preparing to dump another wave of foreclosed homes onto the market here. And I don't know where whomever wrote this was refering to, but construction hasn't increased here in Florida. New Jobs? Those are our jobs and theres no work in the trades still. This is more Media Hype saying everything is going to be just fine. Brought to you by whom? Oh, Bank of America....Go Figure!

July 11 2013 at 11:31 PM Report abuse +2 rate up rate down Reply
RMS

The same problem still exists. Just try qualifying for a mortgage these days. Banks are not as willing to make loans these days and take the risks. They want stellar credit, large down payments, etc. Also, many homeowners are "underwater" on their mortgages, having purchased at the height of the market and cannot put their property up for sale, thus interupting the 7 year cycle of homes coming to the market. I do see homes selling quicker than they had been due to a lack of inventory.

July 11 2013 at 9:48 PM Report abuse +1 rate up rate down Reply
1 reply to RMS's comment
vlady1000

Do not believe everything you read/hear. It is not that bad at getting approved. In the last 24 months EVERY person that I know that tried to refi or purchase was approved. A few friends, several co-workers, 2 tenants (with a 2.5% down HUD), my sister, my daughter, me (on several properties), etc. Just takes a little longer and they are looking at things closer. The way it should have always been.

July 11 2013 at 11:38 PM Report abuse rate up rate down Reply
itacurubi

That's still a very low mortgage rate. (And will almost certainly be down next week.)

July 11 2013 at 5:01 PM Report abuse +1 rate up rate down Reply
1 reply to itacurubi's comment
h.hughjardon

Ben pretty much just made that announcement.

July 11 2013 at 10:28 PM Report abuse -2 rate up rate down Reply
tm1160

Better buy while you can folks! It is not to often that you get a market with low rates and good prices. This window is beginning to close.

July 11 2013 at 2:43 PM Report abuse +1 rate up rate down Reply
1 reply to tm1160's comment
vlady1000

The window started to close 12 months ago (when prices were at the bottom) and now closing fast with both prices and rates going up pretty fast. In my area prices are up so much and now compound that with the higher interest rate, that same house now has a P&I payment of about 20% more than 12 months ago. Still time to get in, but the best time to buy is now far behind us.

July 11 2013 at 6:08 PM Report abuse -1 rate up rate down Reply