Mortgage rates carried on their steady ascent last week, moving higher for the seventh consecutive week.
Home loan rates are loosely tied to long-term bond yields, which have been on an upward march. The yield on a 10-year Treasury note climbed to 2.54 percent Wednesday, the first time it has been above 2.5 percent since September 2014.
The Federal Reserve’s decision to raise its benchmark rate had no effect on rates last week because it came too late in the week to be factored into the Federal Home Loan Mortgage Corp.’s survey. The government-supported mortgage-backer aggregates current rates weekly from 125 lenders from across the country to come up with a national average mortgage rate.
Historically, the central bank’s moves have little effect on mortgage rates. Last year, when the Fed raised the federal funds rate, mortgage rates rose initially before falling for six straight weeks.
“The good news is that lenders have been anticipating the Fed’s move and have baked the likelihood of a rate hike into their loan pricing, meaning that mortgage rates are unlikely to change dramatically from where they are today,” said Doug Lebda, founder and chief executive of LendingTree.
Still, many experts are predicting mortgage rates will continue to rise. Bankrate.com, which puts out a weekly mortgage-rate-trend index, found that almost two-thirds of the experts it surveyed think rates will move higher in the coming week.
“Historically, when the Fed has announced a rate hike, it has been beneficial for mortgage rates,” said Katy Parsons, a mortgage originator at Finance of America Mortgage. “But since the election, almost nothing has reacted the way we would expect.”
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average rose to 4.16 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.13 percent a week ago and 3.97 percent a year ago.
The 15-year fixed-rate average rose to 3.37 percent with an average 0.5 point. It was 3.36 percent a week ago and 3.22 percent a year ago. The five-year adjustable-rate average rose to 3.19 percent with an average 0.4 point. It was 3.17 percent a week ago and 3.03 percent a year ago.