After weeks of little change, interest rates for most U.S. home loans climbed this week, with the average 30-year fixed-rate mortgage reaching 4.4% for the first time since January.
The increases followed comments last week by Federal Reserve Chair Janet Yellen that indicated the Fed could start raising short-term interest rates as early as 2015.
The 30-year fixed-rate mortgage average was up from 4.32% last week, according to the latest survey from mortgage buyer Freddie Mac. A year ago the average interest rate on a 30-year fixed-rate loan was 3.57%.
The average rate on a 15-year fixed-rate mortgage also inched upward to 3.42%, from last week’s 3.32%. At this time last year, the 15-year fixed-rate average was at 2.76%.
Averages for hybrid adjustable-rate mortgages were mixed. The five-year ARM rose to 3.10%, up from last week’s 3.02%. The one-year ARM fell to 2.44% this week, down from last week’s average of 2.49%.
The rise in mortgage rates applies additional pressure in local markets that are already feeling an affordability pinch, according to Freddie Mac.
Mortgage rates have been inching up since December, when the Federal Reserve announced it would begin to taper its bond-buying stimulus program. The program has helped offset dramatic gains in real estate prices and kept affordability elevated while the market has stabilized.
Mortgage rates have risen almost a full percentage point since hitting record lows last year. However, rates for the most popular loans have remained under the 4.5% threshold over concerns that the housing market is too weak to support a dramatic upward shift in home prices.
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