Average 30-year mortgage rate rises above 4%, says Freddie Mac

mortgage

Moving higher for a second week, the 30-year mortgage rate broke back above 4%. Freddie Mac calculated that lenders were offering the most popular home loan at an average of 4.02%.

Rates rose for other loan types as well. Freddie Mac said 15-year fixed mortgages were averaging 3.21%, up from 3.13% a week earlier, and the start rates on adjustable loans edged higher.

The widely watched survey, released Thursday, had shown the 30-year mortgage below 4% for the three prior weeks, bottoming out at 3.92% two weeks ago at the low point for this year.

The rate opened 2014 at about 4.5%, and most economists predicted it would rise higher as the Federal Reserve tapered off an extraordinary economic stimulus program.

Instead, rates fell, even as the Fed cut back on and then ceased its massive purchases of Treasury bonds and mortgage securities issued by Freddie Mac and Fannie Mae.

Frank Nothaft, Freddie Mac’s chief economist, said that strong economic reports this week raised the prospect of higher inflation and that more investors might dump bonds for stocks and other investments, driving rates higher.

Gross domestic product, the value all goods and services produced in the U.S., as well as an index of manufacturing activity, came in higher than analysts had anticipated.

Freddie Mac asks lenders across the country about rates being offered to solid borrowers who pay about half of 1% of the loan amount in upfront lender fees and discount points.

Third-party fees for services typically paid by borrowers, such as for appraisals, are not included in the survey.

Original article by E. Scott Reckard @ L.A. Times