Home-loan rates begin week at two-year high

Fixed-rate mortgages will begin the week at their highest levels in two years as speculation mounts that the Federal Reserve will soon taper its bond purchase program.

The Federal Reserve released its monetary policy committee minutes for July last week, which indicated broad support among members to start reducing its bond purchase program later this year which could send rates higher.

“Meeting participants acknowledged mortgage rate increases might restrain housing market activity, but several members expressed confidence the housing recovery would be resilient in the face of higher rates,” said Frank Nothaft, Freddie Mac’s chief economist. “In fact, existing-home sales increased in July to the strongest pace since November 2009 and home builder confidence in August rose to its highest reading since November 2005. Both increases occurred after mortgage rates had risen from their spring-time lows.”

Freddie Mac reported the following national averages:

30-year fixed-rate mortgages: averaged 4.58 percent, rising from last week’s 4.40 percent average. A year ago at this time, 30-year rates averaged 3.66 percent.
15-year fixed-rate mortgages: averaged 3.60 percent, rising from last week’s 3.44 percent. Last year at this time, 15-year rates averaged 2.89 percent.
5-year adjustable-rate mortgages: averaged 3.21 percent, dropping from last week’s 3.23 percent average. Last year at this time, 5-year ARMs averaged 2.80 percent.
1-year ARMs: averaged 2.67 percent, holding the same as last week. A year ago, 1-year ARMs averaged 2.66 percent.