Mortgage Rates in the U.S. Increase to Highest for 2015Kathleen M. Howley
Mortgage rates in the U.S. rose to a 2015 high this week as bond investors reacted to reports showing the housing market is heating up.
The average rate for a 30-year fixed mortgage was 3.87 percent, up from 3.84 percent last week and matching the level at the end of 2014, Freddie Mac said in a statement Thursday. The average 15-year rate increased to 3.11 percent from 3.05 percent, according to the McLean, Virginia-based mortgage financier.
Home-loan costs climbed as investors speculated that positive economic data will encourage the Federal Reserve to increase the amount it charges banks to borrow funds. In her first public comments on monetary policy since late March, Fed Chair Janet Yellen said last week that if the economy continues to improve as she expects, “it will be appropriate at some point this year” to start raising rates.
“We’ve seen the economy moving in fits and starts this year, but now we are beginning to see signs that it is firming,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data company.
Signed contracts to buy previously owned homes rose to a nine-year high in April, the National Association of Realtors reported Thursday. The increase was led by gains in the Northeast and Midwest regions, the trade group said.
Earlier this week, data showed home prices and sales of new houses rose at a faster pace than economists expected. Other reports showed U.S. business investment could pick up in the second half of the year, and consumer confidence improved.
The average rate for a 30-year fixed mortgage probably will reach 4.4 percent by the fourth quarter, according to the Mortgage Bankers Association. It probably won’t break 5 percent until mid-2016, the trade group said in a forecast. For the year, home lending may total $1.3 trillion, up 14 percent from 2014, as the economy spurs gains in home sales and prices, the group said.
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