Posted by Damon L. Chavez on Friday, December 9th, 2016 at 7:49am.
WASHINGTON — Long-term U.S. mortgage rates climbed for the sixth straight week in the aftermath of Donald Trump’s election win, marking new highs for the year.
Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed rate loan jumped this week to 4.13 percent from 4.08 percent the previous week. The benchmark rate surpassed its 3.95 percent level of a year ago.
The rate on 15-year home loans, a popular choice for people who are refinancing, rose to 3.36 percent from 3.34 percent.
Long-term mortgage and interest rates have surged in the five weeks since Trump’s surprise victory in November to become the country’s next president.
Since the election, bond investors have been demanding higher long-term yields and paying lower prices for bonds, as they look toward rising inflation under the Trump administration. Anticipated tax cuts and increased government spending to upgrade roads, bridges and airports could stoke inflation. That would depress prices of long-term Treasury bonds because inflation would erode their value over time. Bond yields move opposite to prices and also influence long-term mortgage rates.
The yield on the 10-year Treasury bond stood at 2.34 percent Wednesday, down from 2.38 percent a week earlier. But by Thursday morning, it had risen to 2.40 percent. That’s up sharply from 1.87 percent on Election Day Nov. 8.
Next week, Federal Reserve policymakers are expected to raise the central bank’s benchmark interest rate at their meeting for the first time in nearly a year.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.
The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged this week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.
Rates on adjustable five-year loans rose to 3.17 percent from 3.15 percent. The fee ticked up to 0.5 point from 0.4 point.