Fixed mortgage rates rose for the third straight week after setting all-time lows, with the typical 30-year rate increasing from 3.59% to 3.62%, home finance giant Freddie Mac reported.
Freddie Mac’s weekly survey, released Thursday morning, pegged this week’s average for the 15-year fixed loan at 2.88%, up from 2.84% a week earlier. The start rates on variable-interest loans were mixed.
As the economy strengthens in fits and starts, demand decreases for the ultra-safe securities issued by the U.S. Treasury. That pushes up their yield, or effective interest rate, and many other rates, including those on mortgages, tend to follow.
The yield on the benchmark 10-year Treasury note closed at 1.8% Wednesday after bottoming out at 1.4% on July 24. The average 30-year fixed mortgage rate, as calculated by Freddie Mac, hit an all-time low of 3.49% that same week.
The Freddie Mac rate survey, which dates back to 1971, is a closely watched indicator of mortgage trends. It asks lenders what they are offering on loans of up to $417,000 to solid borrowers who have 20% or higher down payments or 20% equity in their homes if they are refinancing.
In the latest survey, these borrowers would have paid 0.6% of the loan amount in lender fees and discount points.
Rising rates could throttle the latest in a long series of refinancing booms as mortgage rates gradually descended from double-digit levels in the 1980s.
The mortgage arms of big banks and independent lenders have been collecting huge profits when they sell loans made at the low rates.