16 Feb Mortgage rates climb to their highest levels in nearly four years
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average shot up to 4.38 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.32 percent a week ago and 4.15 percent a year ago. The 30-year fixed rate last hit this height in April 2014.
The 15-year fixed-rate average jumped to 3.84 percent with an average 0.5 point. It was 3.77 percent a week ago and 3.35 percent a year ago. The five-year adjustable rate average rose to 3.63 percent with an average 0.4 point. It was 3.57 percent a week ago and 3.18 percent a year ago.
Investors reacted to news that the consumer price index, a measure of how fast prices are rising, went up more than expected last month. The 0.5 percent increase in the CPI was its largest gain since March 2005. The monthly Labor Department report showed increases in the cost of gas, rent, clothes, medical care and food.
Concerns about inflation caused U.S. Treasury prices to slump. Rising inflation erodes the value of a bond’s fixed payments. With growing budget deficits expected to drive up the government’s borrowing costs, investors will probably demand extra yield from U.S. bonds to compensate for their risk.