Mortgage Rates Break New 2015 Record High

Confidence in Greece’s EU debt deal and promises from the Federal Reserve Chairwoman to raise rate this year led investors to ease off of Treasury bonds, pushing mortgage interest rates to yearly highs, according to mortgage guarantor Freddie Mac Thursday.

The average rate on a 30-year fixed rate conventional mortgage jumped to 4.09 percent, excluding fees, in the latest week, from 4.04 percent the previous week and the highest level of 2015 to date. The rate is still slightly below last year at this time when it averaged 4.13 percent.

“The crisis in Greece continues to generate volatility in U.S. Treasury yields,” wrote Freddie Mac chief economist Sean Becketti. “The tentative agreement hammered out last weekend gave investors the confidence to pull back a bit from Treasuries. Rates rose about 16 basis points on the 10-year Treasury from last week. As a result, the average rate on a 30-year fixed-rate mortgage rose 5 basis points this week to 4.09 percent, the highest level since October of last year.”

Investors were also influenced by comments from the head of the Federal Reserve, Janet Yellen, who told Congress on Wednesday that the Fed’s target interest rate will most likely see its first increase in seven years before the end of 2015.

“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target,” said Yellen before the House Financial Services Panel.

The 15-year fixed rate mortgage also reached new heights this week, with the average growing to 3.25 percent, up from 3.20 percent the week before and up even from a year ago when the average was 3.23 percent.

The one-year adjustable rate mortgage was unchanged at 2.50 percent from the previous week but was up from last year’s 2.39 percent.

 

 




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