U.S. mortgage rates rose for a fifth week, sending borrowing costs for a 30-year loan to the highest level in 14 months.
The average rate for a 30-year fixed mortgage jumped to 3.91 percent in the week ended today, from 3.81 percent, McLean, Virginia-based Freddie Mac said in a statement. The average 15-year rate rose to 3.03 percent from 2.98 percent.
Mortgage rates have been following government bond yields higher as a strengthening economy stokes speculation that the Federal Reserve will reduce efforts to push down borrowing costs. The increase may spur homebuyers to accelerate deals to lock in low rates, said Keith Gumbinger, vice president of HSH.com, a mortgage-information website.
“It pushes the time frame,” said Gumbinger, based in Riverdale, New Jersey. “You may have a near-term increase so deals can get done. But it’s not as though people who have not come into the process are necessarily going to be energized to look at a home.”
Rising rates have restrained refinancings. Applications for loans from homeowners seeking to reduce monthly payments dropped 15 percent last week to the lowest level since November 2011, according to an index from the Mortgage Bankers Association.
The 15-year rate topped 3 percent for the first time since May of last year. It hit a record 2.56 percent last month. The record low for a 30-year loan is 3.31 percent, reached in November.