US average 30-year mortgage rate rises to 4.16 percent

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WASHINGTON (AP) — Long-term U.S. mortgage rates climbed for the seventh straight week following Donald Trump’s election victory, again marking new highs for the year.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed rate loan rose this week to 4.16 percent from 4.13 percent the previous week. The benchmark rate is well above its 3.97 percent level of a year ago.

The rate on 15-year home loans, a popular choice for people who are refinancing, ticked up to 3.37 percent from 3.36 percent.

Long-term mortgage and interest rates have surged in the weeks since Trump’s surprise victory in November.

On Wednesday, the Federal Reserve announced an increase in its benchmark interest rate for the first time in nearly a year.

Since the election, bond investors have been demanding higher long-term yields and paying lower prices for bonds, as they look toward rising inflation under the Trump administration. Anticipated tax cuts and increased government spending to upgrade roads, bridges and airports could stoke inflation. That would depress prices of long-term Treasury bonds because inflation would erode their value over time. Bond yields, which have been in an upward trend for the last month, move opposite to prices. They influence long-term mortgage rates.

The yield on the 10-year Treasury bond touched its highest level in more than two years and sat at 2.57 percent late Wednesday, up sharply from 2.34 percent a week earlier. It rose further to 2.59 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged this week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.

Rates on adjustable five-year loans rose to 3.19 percent from 3.17 percent. The fee slipped to 0.4 point from 0.5 point.