WASHINGTON – Average long-term U.S. mortgage rates rose this week, reaching highs for the year as investor anxiety over economic turbulence abroad moderated.
Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage increased to 4.09 per cent from 4.04 per cent a week earlier. The new level is the highest since last October.
The rate on 15-year fixed-rate mortgages rose to 3.25 per cent from 3.20 per cent. That matched its high for the year set last month.
Investors recently had been seeking safety in U.S. Treasury bonds amid economic tumult in China and Greece. Greece’s agreement this week with its European partners on a rescue package has calmed investors and brought some retreat from Treasurys, pushing interest rates higher.
The Greek Parliament approved early Thursday a pension overhaul, tax increases and other measures demanded by bailout lenders.
Bond yields for Treasurys have been pushed higher by the decline in bond prices. The yield on the key 10-year Treasury note jumped to 2.36 per cent Wednesday from 2.20 per cent a week earlier. Mortgage rates often follow the yield on the 10-year note. It traded at 2.39 per cent Thursday morning.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of 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 per cent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan rose to 0.6 point from 0.5 point.
The average rate on five-year adjustable-rate mortgages increased to 2.96 per cent from 2.93 per cent; the fee rose to 0.5 point from 0.4 point. The average rate on one-year ARMs was unchanged at 2.50 per cent; the fee remained at 0.3 point.