SOURCE: WaPo
“Interest rates for 30-year home loans surged this week to the highest level in eight months because of the improving economy and the end of a government push to keep rates low.
The average rate on a 30-year, fixed-rate mortgage was 5.21 percent, up from 5.08 percent a week earlier, mortgage company Freddie Mac reported Thursday. That’s the highest since mid-August, when the average rate was 5.29 percent.
Rates had dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended last week, but the Fed left the door open to reviving the program if the economy weakens.
Mortgage rates for 30-year loans may rise to 6 percent — a level not seen since November 2008 — by the end of the year, said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio. A stronger economy and increased job creation may offset the negative effect on housing demand as consumers become more confident about making large purchases, he said.
This week, the average rate on a 15-year fixed-rate mortgage was 4.52 percent, up from 4.39 percent last week.
Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, up from 4.1 percent a week earlier. Rates on one-year, adjustable-rate mortgages rose to 4.14 percent from 4.05 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.6 of a point for 30-year, 15-year and 5-year loans and 0.5 of a point for 1-year-loans.
The number of existing homes for sale jumped 9.5 percent in February, data from the National Association of Realtors show. Government tax credits for first-time home buyers and some current owners expire at the end of the month.”
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