By Crissinda Ponder • Bankrate.com
Interest rates on mortgages rose this week as the market began preparing for a potential federal funds rate hike at the Federal Reserve’s next policy-setting meeting.
Yields on Treasury notes have been higher this week compared with last week. They started increasing after the Federal Open Market Committee meeting concluded last week, when the central bank hinted at a possible December rate hike.
While speaking to the House Financial Services Committee, Federal Reserve Board Chair Janet Yellen said Wednesday that a rate hike next month is a “live possibility.”
The 10-year Treasury yield is up about 20 basis points, going from around 2.03% Oct. 28 to about 2.23% Wednesday afternoon, according to CNBC.
Mortgage rates have somewhat followed suit, says Michael Becker, branch manager at Sierra Pacific Mortgage in White Marsh, Maryland.
“It’s not awful, but they were trending downward (before the meeting) because people thought the Fed was on hold until probably 2016,” he says.
A look at this week’s rates
The benchmark 30-year fixed-rate mortgage rose to 3.98% from 3.88%, according to Bankrate’s national survey of large lenders. A year ago, the rate was 4.14%. Four weeks ago, it was 3.95%. The mortgages in this week’s survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.98%. This week’s rate is equal to the 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.23% from 3.13%.
The benchmark 30-year fixed-rate jumbo mortgage rose to 3.87% from 3.84%.
The benchmark 5/1 adjustable-rate mortgage rose to 3.28% from 3.17%.
