As the Federal Reserve contemplates raising its benchmark federal funds rate, home loans are becoming more expensive. Indications are that the days of the 30-year fixed-rate home loan at a rate below 4 percent are gone, if not for good, certainly for a long time.
For the third week in a row, the 30-year fixed-rate average remained above the 4 percent mark, according to the latest data released Thursday by Freddie Mac. It rose to 4.02 percent with an average 0.7 point this week. (Points are fees paid to a lender equal to 1 percent of the loan amount.) The 30-year fixed rate was 4 percent a week ago and 4.14 percent a year ago.
Although rates are rising, they remain near their all-time lows. The 30-year fixed-rate average hasn’t been above 5 percent since February 2011, and it hasn’t topped 6 percent since November 2008.
The 15-year fixed-rate average dropped to 3.21 percent with an average 0.6 point. It was 3.23 percent a week ago and 3.22 percent a year ago.
Hybrid adjustable rate mortgages also fell. The five-year ARM average edged down to 2.98 percent with an average 0.4 point. It was 3 percent a week ago and 2.98 percent a year ago.
The one-year ARM average slipped to 2.5 percent with an average 0.3 point. It was 2.53 percent a week ago.
“Economic releases confirmed increasing strength in housing,” Len Kiefer, Freddie Mac deputy chief economist, said in a statement.
By Kathy Orton at www.washingtonpost.com