Driven primarily by climbing yields on Treasury notes in recent weeks, the benchmark 30-year fixed mortgage climbed to 5.21 percent this week, up from 5.08 percent last week, Freddie Mac said.
It’s the highest rate on the 30-year fixed since the week ending August 13, 2009 when it averaged 5.29 percent.
The 30-year rate was at 4.87 a year ago at this time, and reached its lowest point of 4.71 percent in December, according to Freddie Mac’s weekly survey.
The 15-year fixed-rate mortgage this week averaged 4.52 percent, up from last week when it averaged 4.39 percent.
The yield on the Treasury 10-year note, which influences rates on mortgages and other loan products, has been climbing as private investors have opted for higher-yield investments, such as equities.
Yields on Fannie Mae and Freddie Mac mortgage securities last week rose to their highest level in three months.
Another factor is an unemployment report Friday that saw the most jobs gain since March 2007. A sustainable economic recovery, or the perception of one, would give support to higher interest rates.
Fed officials, however, have not strayed from their position that a mild to moderate recovery is underway, calling for sustained near-zero benchmark interest rate.
“Once again, mortgage rates followed bond yields higher amid a positive March employment report,” said Frank Nothaft, Freddie Mac vice president and chief economist.
Nothaft also noted that the first-time and repeat homebuyer tax credits, which expire April 30, are spurring increased activity, particularly by first-time homebuyers relying on government-insured mortgages.
Mortgage applications for home purchases were up 17 percent for the first week in April of this year for government-insured loans, compared to the week ending Dec. 4, 2009 – which was the first week after the original expiration of the first-time homebuyer tax credit.
That compares with an 11 percent decline in conventional loans during the same time period, according to the Mortgage Bankers Association.
Homebuyers must enter a housing contract by April 30th and close by June 30th to receive the tax credit – up to $8,000 for first-time buyers and $6,500 for qualified repeat buyers.
