Mortgage rates soar, Bankrate, Freddie Mac find

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates, which have been inching higher since early November, moved significantly higher over the past week, according to separate surveys by Bankrate and Freddie Mac.

Bankrate’s national bank survey put the 30-year fixed rate mortgage at 4.89 percent,  with 0.36 point, up from last week’s 4.71 percent.

Freddie Mac’s Primary Mortgage Market Survey has the 30-year averaging 4.61 percent with 0.7 point this week, up from 4.46 percent a week ago. Both surveys were released Thursday.

"After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them,” said Freddie Mac Chief Economist Frank Nothaft.  “Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November, which for a $200,000 conventional loan amounts to $50 more in monthly payments.”

Bankrate also cited the Federal Reserve’s move to buy up outstanding Treasury bonds, which kicked into high gear over the past week. Bond investors haven't responded kindly to the prospects of additional supply, with bond prices falling and bond yields rising. Mortgage rates are closely related to yields on long-term government bonds.

Also from the two surveys: the 15-year fixed rate mortgage jumped to 3.96 percent with 0.7 point, up from 3.81 percent last week, according to Freddie Mac. Bankrate put the 15-year at 4.26 percent with 0.36 point, up from 4.07 percent.