Rates on 30-year, fixed-rate home loans spiked 0.53 percentage points to an average of 4.46% this week — the largest weekly increase in more than 26 years, mortgage giant Freddie Mac said Thursday.The 30-year loan, which stood at 3.35% as recently as early May, is at its highest level since July 2011.
Rates for 15-year loans, popular with homeowners refinancing their mortgages, jumped 0.46 percentage points to 3.5%.
An extra percentage point will cost homebuyers with 30-year, fixed-rate mortgages $56 more a month for every $100,000 they borrow.
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“If sustained, the rate increase will take some of the steam out of the housing market,” said Mark Zandi, chief economist at Moody’s Analytics.
The sudden jump in rates is driven by uncertainty over whether the Federal Reserve’s economic stimulus program, called quantitative easing, will continue, according to Keith Gumbinger of HSH.com, a mortgage information provider.
“The aftermath of the Fed meeting and Mr. Bernanke’s remarks … about the future of QE continue to roil markets,” Gumbinger said.
By Les Christie @CNNMoney