Mortgage rates rose to their highest level in over four years, as 10-year Treasury yields broke the 3% ceiling this past week.
The 30-year fixed-rate mortgage averaged 4.58% for the week ending April 26, up from last week when it averaged 4.47%. This rate averaged 4.03% for the same week last year.
"Mortgage rates are now at their highest level since the week of Aug. 22, 2013," said Sam Khater, who just joined Freddie Mac as its new chief economist, in a press release. "Higher Treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news, are behind the uptick in rates over the past week."
The 10-year Treasury yield crossed and remained above the 3% threshold on April 25 for the first time since January 2014. But overnight, it dipped back below 3% and at 10:45 a.m. on April 26 it was at 2.99%.
"Despite the increase in borrowing costs, demand for home purchase credit remains solid. The Mortgage Bankers Association reported in their latest mortgage applications survey that activity was up 11% from a year ago," Khater said.
The 15-year fixed-rate mortgage this week averaged 4.02%, up from last week when it averaged 3.94%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.27%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.74% this week with an average 0.3 point, up from last week when it averaged 3.67%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.12%.
"After flatlining for much of the past two months, mortgage rates have again moved definitively upward, touching their highest levels since January 2014," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on April 25.
"This upward momentum suggests a growing acceptance of the underlying strength of the American economy that markets seemed to discount over the past couple of months. Several Fed speakers over the past week noted the strength of incoming U.S. economic data, which will be particularly important going into next week's Federal Open Market Committee meeting. Gross domestic product and wage data due later this week will be important metrics to watch as recent geopolitical flashpoints seem to be receding."
Khater joined Freddie Mac after 11 years at CoreLogic, where he most recently served as vice president of research and deputy chief economist. Prior to that, he was a senior economist at Fannie Mae and an economist at the National Association of Realtors.