U.S. Mortgage Rates Jump to More Than 2-Year High After Fed Hikeby
U.S. mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Federal Reserve increased its benchmark lending rate.
The average rate for a 30-year fixed mortgage was 4.3 percent, up from 4.16 percent last week, Freddie Mac said in a statement Thursday. The average 15-year rate climbed to 3.52 percent, the highest since January 2014, from 3.37 percent, the McLean, Virginia-based mortgage-finance company said.
Federal Reserve policy makers last week rose interest rates for the first time this year and projected more increases for 2017 as the economy strengthens. Mortgage rates have shot up since early November, tracking a jump in Treasury yields as investors bet that President-elect Donald Trump’s proposals will boost economic growth.
“A week after the only rate hike of 2016, the mortgage industry digested the Fed’s decision,” Sean Becketti, Freddie Mac’s chief economist, said in the statement. Following Fed Chair Janet Yellen’s speech last Wednesday, “the 10-year Treasury yield rose approximately 10 basis points. The 30-year mortgage rate rose 14 basis points to 4.30 percent, reaching highs we have not seen since April 2014.”
Before the election, the average rate for a 30-year loan had been below 4 percent all year and was hovering near a record low. The monthly payment on a $300,000 loan has jumped to $1,485 from $1,354 at the start of November.