US mortgage rates up; 30-year at 7-year high 4.72 per cent

WASHINGTON – Long-term U.S. mortgage rates are up for the fifth straight week, with the key 30-year rate reaching its highest level in more than seven years.

Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.72 per cent from 4.65 per cent last week. The average benchmark rate has risen from 3.83 per cent a year ago.

The average rate on 15-year, fixed-rate loans increased to 4.16 per cent this week from 4.11 per cent last week.

The Federal Reserve signalled its confidence in the economy on Wednesday by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end.

The strong economy and anticipation of more short-term rate hikes by the Fed are helping drive the increase in mortgage rates.

Economists believe the country is on track for annual growth this year of around 3 per cent. That would be the best performance since 2005, three years before the 2008 financial crisis pushed the U.S. into the worst recession since the 1930s.

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.

The average fee on 30-year fixed-rate mortgages was unchanged from last week at 0.5 point. The fee on 15-year mortgages also remained at 0.5 point.

The average rate for five-year adjustable-rate mortgages rose to 3.97 per cent from 3.92 per cent last week. The fee slipped to 0.3 point from 0.4 point.