The average 30-year fixed mortgage rates in the United States spiked to reach a two-month high since January at 4.4 percent, Freddie Mac, the government-backed lending giant, announced Thursday.
The 30-year fixed interest rates were up 0.08 percent from last week's rate of 4.32 percent. The average 15-year fixed mortgage rates also edged up to 3.42 percent from the 3.32 percent recorded last week. The five-year hybrid adjustable rate (ARM) rose 0.5 points to 3.10 percent from last week's 3.05 percent, while the one-year ARM averaged 2.44 percent, falling 0.4 percent from last week's 2.49 percent.
Rise in the mortgage rates came after Fed Chair Janet Yellen's comments on raising interest rates in the near future.
"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. Also, the S&P/Case-Shiller [PDF] 20-city composite house price index rose 13.2 percent over the 12-months ending in January 2014," Frank Nothaft, vice president and chief economist at Freddie Mac, said in an official statement.
In last week's two-day policy meeting, Yellen said the Fed will be cutting its $55 billion monthly bond-purchasing scheme on a steady economic recovery and will continue to scale it back unless the market drops to dangerous levels.
The mortgage rate spike has dampened demand in the market. Prices have also risen in the past few months: According to the National Association of Realtors, the number of existing home sales fell to a 4.6 million annual rate.
"The housing numbers have been really disappointing. Most people were expecting stronger pickup in housing this year that would lift the economy into a stronger growth pattern, and that isn't happening," Patrick Newport, an economist with IHS Global Insight, told Bloomberg in a phone interview.
Last week, experts speculated that mortgage rates would shoot up in the coming weeks based on the Fed's decision to raise interest rates in the near future. Chances are the rates will rise by mid-2015, they added.
