Mortgage rates went up this week as it became clear that the Federal Reserve might hike short-term interest rates as early as next month.
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Janet Yellen, chair of the Federal Reserve, told Congress this week that the central bank wants to raise the overnight federal funds rate gradually. That is the course that the central bank has charted so far; it has hiked the rate twice in the last 14 months.
In her congressional testimony, Yellen said it would be unwise to wait too long to raise the overnight rate again. She explained that a delay could require the Fed “to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession.”
When Yellen added that another increase is possible “at our upcoming meetings,” bond investors took that as a signal that the next hike could happen as early as the March 14-15 monetary policy meeting. Bond yields went up, and mortgage rates followed.
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Mortgage rates this week
The benchmark 30-year fixed-rate mortgage rose this week to 4.35 percent from 4.27 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 3.85 percent. Four weeks ago, the rate was 4.18 percent. The 30-year fixed-rate average for this week matches the 52-week high of 4.35 percent, and is 0.83 percentage points above the 52-week low of 3.52 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.25 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 3.83 percent. This week’s rate is 0.52 percentage points higher than the 52-week average.
- The benchmark 15-year fixed-rate mortgage rose to 3.51 percent from 3.49 percent.
- The benchmark 5/1 adjustable-rate mortgage rose to 3.51 percent from 3.46 percent.
- The benchmark 30-year fixed-rate jumbo mortgage rose to 4.34 percent from 4.27 percent.
At the current 30-year fixed rate, you’ll pay $497.81 for every $100,000 you borrow, up from $493.11 last week.
At the current 15-year fixed rate, you’ll pay $715.37 for every $100,000 you borrow, up from $714.39 last week.
At the current 5/1 ARM rate, you’ll pay $449.60 for every $100,000 you borrow, up from $446.81 last week.