Mortgage Rates On The Rise, Still Historically Low
DENVER (CBS4) – There was another increase in mortgage rates last week, but they’re still at historically low levels.
The rate on a 30-year fixed-rate mortgage went up, but not by much. However, it was enough to get the attention of everyone in the housing market, and for good reason since mortgage rates have hit their highest rates in more than a year, making homes more expensive for buyers.
According to Freddie Mac, mortgage rates jumped to 3.81 percent this week. That’s 15 percent higher than the record low of 3.31 percent set the week of Nov. 21, 2012. The 30-year rate was as low as 3.35 percent in early May. The 15-year fixed-rates also spiked to almost 3 percent.
Many in the mortgage industry are attributing this latest increase on some comments made by Fed chair Ben Bernanke. It left the impression that the Fed’s stimulus policy might be pulled back in September. The stimulus program, in which the Fed buys up as much as $85 billion a month in mortgage-backed securities, has kept interest rates low by providing a willing buyer for loans.
Refinancing applications fell 12 percent week over week, according to the Mortgage Bankers Association, the largest single-week drop this year.
The good news is, even with rates rising they’ll have to rise much more to have a significant impact on buyers.