Mortgage rates have been inching upwards in expectation of Fed hikes. However, the streak of increases took off in earnest after Election Day. This week saw another big jump after expectations for three Fed interest rates hikes in 2017 – rather than two – were revealed at last week’s FOMC meeting.
Mortgage rates continue to be driven higher by the consensus forecast of tax cuts and fiscal stimulus that spur faster economic growth and higher inflation in 2017.
For the eighth consecutive week the benchmark 30-year fixed mortgage rate zooming to the highest level since September 2014 at 4.31 percent, according to Bankrate.com’s weekly national survey. The 30-year fixed mortgage has an average of 0.24 discount and origination points.
The larger jumbo 30-year fixed similarly climbed to 4.36 percent, and the average 15-year fixed mortgage rate hit 3.56 percent, the highest in more than 2-1/2-years. Adjustable mortgage rates followed suit in hitting multi-year highs, with the 5-year ARM ascending to 3.56 percent and the 7-year ARM bounding higher to 3.80 percent.
At the current average 30-year fixed mortgage rate of 4.31 percent, the monthly payment for a $200,000 loan is $990.92.
30-year fixed: 4.31% — up from 4.18% last week (avg. points: 0.24)
15-year fixed: 3.56% — up from 3.42% last week (avg. points: 0.21)
5/1 ARM: 3.56% — up from 3.45% last week (avg. points: 0.36)
Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in 10 top markets.