Mortgage rates jumped up this week, propelled by remarks made at Janet Yellen’s first press conference at Federal Reserve chair.
In its weekly Primary Mortgage Market Survey, Freddie Mac [1] reported an increase of 8 basis points in the 30-year fixed average rate, bringing up to 4.40 percent (0.6 point) for the week ending March 27. A year ago at this time, the 30-year fixed-rate mortgage (FRM) averaged 3.57 percent.
The 15-year FRM also climbed, moving up a tenth of a percentage point to an average 3.42 percent (0.6 point).
Frank Nothaft, VP and chief economist for Freddie Mac, explained the increase: “Mortgage rates rose following the uptick on the 10-year Treasury note after comments by the Federal Reserve Board Chair Janet Yellen indicated a possible increase in interest rates as soon as early 2015.”
Nothaft also pointed to relative strength in the S&P/Case-Shiller 20-city composite home price index, which saw an increase of 13.2 percent year-over-year.
Whatever the cause, the effect means “additional pressure for those local markets that are already feeling an affordability pinch,” Freddie Mac says.
Switching to adjustable-rate mortgages (ARMs), the 5-year Treasury-indexed hybrid ARM averaged 3.10 percent (0.5 point) this week, up from 3.02 percent in the last survey. On the other hand, the 1-year ARM moved down 5 basis points to 2.44 percent (0.4 point).
Meanwhile, finance website Bankrate.com [2] measured the 30-year fixed average at 4.51 percent and the 15-year fixed at 3.56 percent, both up over the week. Also increasing was the 5/1 ARM, which climbed a tenth of a point to 3.36 percent.