December 22, 2016 / 4:32 PM / in 7 months

UPDATE 1-U.S. 30-year mortgage rates rise to highest since 2014 - Freddie Mac

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    NEW YORK, Dec 22 (Reuters) - Interest rates on U.S. 30-year
fixed-rate mortgages rose to their highest levels since April
2014 following the Federal Reserve's hint it might raise
interest rates at a swifter pace in 2017, mortgage finance
agency Freddie Mac said on Thursday.
    The borrowing cost on 30-year mortgages, the most widely
held type of U.S. home loan, averaged 4.30 percent in the week
ended Dec. 22, the highest since 4.33 percent in the week of
April 24, 2014. Last week, 30-year mortgage rates averaged 4.16
percent, Freddie Mac said.
    Home borrowing costs have increased in step with the surge
in U.S. bond yields as investors dumped bonds around the world
on bets U.S. President-elect Donald Trump would introduce tax
cuts and federal spending that spur U.s. growth and inflation.
    Since the Nov. 8 U.S. election, average 30-year mortgage
rates have increased just over three-quarter points, as the
benchmark 10-year Treasury yield has risen about
0.70 point and hit its highest level since September 2014 last
week. 
    Mortgage rates advanced further in recent days after the
U.S. central bank on Dec. 14 hinted it might raise short-term
interest rates at a faster pace than previously thought on an
improving jobs market and signs of inflation moving up to its 2
percent goal. 
    "A week after the only rate hike of 2016, the mortgage
industry digested the Fed's decision and this week's survey
reflects that response," Freddie Mac chief economist Sean
Becketti said in a statement.
    Below is a summary of Freddie Mac's average mortgage rates
in the week ended Dec. 22:
 Loan type      Latest week (pct)  Week ago (pct)  Year ago (pct)
 30-year fixed  4.30               4.16            3.96
 15-year fixed  3.52               3.37            3.22
 5-year ARM     3.32               3.19            3.06
 
     
    

    
 (Reporting by Richard Leong; Editing by Chizu Nomiyama)

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