Mortgage rates rise as economic outlook improves

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Mortgage rates climbed for the fifth-straight week to 4.83 percent, according to Freddie Mac’s weekly survey.

The average 30-year, fixed rate mortgage rose 0.22 percentage points over last year’s rate of 4.61 percent. A year ago, average rates were 4.94 percent.

The average 15-year, fixed-rate mortgage rose 0.21 percentage points this week. The average rate is 4.17 percent, compared with 3.96 percent last week and 4.38 percent a year ago.

Freddie Mac’s chief economist, Frank Nothaft, said mortgage rates rose over concerns about an increase in inflation due to strong economic news caused bond yields to increase.

“For instance, the growth in retail sales excluding automobiles in November was twice that of the market consensus forecast,” said Nothaft. “ Industrial production showed the biggest gain in November since July, according to the Federal Reserve Board . And consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, rose to a six-month high in December. As a result, interest rates for 30-year fixed mortgages this week were the highest since the week of May 20th of this year.”

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