WASHINGTON – on the Long-term US mortgage rates climbed again this week, hitting the highest levels since 2014.
Mortgage giant Freddie Mac said Thursday that the rate on the 30-year loans rose to an average 4.30 percent from 4.16 percent last week, the highest since April 2014. The average for 15-year mortgage rose to 3.52 percent from 3.37 percent last week to the highest since January 2014.
Rates on adjustable-five-year mortgages rose this week to 3.41 percent, the highest since mid-2011.
Rates have increased since the Nov. 8 election of Donald Trump. Investors bid higher rates, because they believe that the president-elect’s plans for tax cuts and higher infrastructure spending will drive economic growth and inflation.
And last week, the Federal Reserve, citing improvement in the U.S. economy, increased short-term interest rates in the U.S. for the second time in a decade. “The mortgage industry digested the Fed’s decision, and this week is the survey-which reflects the response”, says Sean Becketti, Freddie Mac’s chief economist.
More people are at risk of priced of the housing market, because the prices are rising at a time when there is a shortage of properties for sale, driving the bids higher. The National Association of Realtors reported Wednesday that less than 1.9 million homes were for sale in November, a decrease of 9 percent compared to a year ago. The median price of an existing home is almost 7 percent compared to a year ago, on $234,900.
The estate Agents predict that higher rates and declining affordability in many parts of the country is likely to lead to a small profit in the sales of existing homes next year, a 2 percent increase to about 5.52 million.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday of each week.
The average no 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 remained unchanged this week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.
The payment on the adjustable five-year loans remained at 0.4 point.