Long-term U.S. mortgage rates rose this week for a second straight week, posting new highs for the year. The markets were anticipating an increase in a key interest rate by the Federal Reserve, which the Fed announced Wednesday.
Mortgage buyer Freddie Mac said Thursday the rate on 30-year, fixed-rate loans climbed to 4.30 percent from 4.21 percent last week. The benchmark rate stood at 3.73 percent a year ago and averaged 3.65 percent through 2016, the lowest level in records dating to 1971.
The rate on 15-year mortgages increased to 3.50 percent from 3.42 percent last week.
The Fed’s move marked the second time in three months that the central bank has raised its benchmark interest rate. The Fed also forecast two additional hikes this year. The Fed action reflects a consistently solid U.S. economy and will likely mean higher rates on some consumer and business loans.
The key short-term rate is rising by a quarter-point to a still-low range of 0.75 percent to 1 percent. The Fed said in a statement that a strengthening job market and rising prices had moved it closer to its targets for employment and inflation.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and 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 unchanged this week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.
Rates on adjustable five-year loans rose to 3.28 percent from 3.23 percent last week. The fee held at 0.4 point.
News Source: Floridarealtors.org