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UPDATE 1-U.S. 30-year mortgage rates hit over 2-year high -Freddie
December 8, 2016 / 4:14 PM / 9 months ago

UPDATE 1-U.S. 30-year mortgage rates hit over 2-year high -Freddie

* Mortgage rates rise despite pullback in U.S. bond yields
    * Fifteen-year mortgage rate hits highest since Oct. 2014
    * Five-year adjustable rate reaches highest since Sept. 2013

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    NEW YORK, Dec 8 (Reuters) - The average interest rate on
U.S. 30-year fixed-rate mortgages rose to its highest level in
more than two years even as benchmark Treasury yields retreated
from near 1-1/2-year peaks, 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 4.13 percent in the week
ended Dec. 8, the highest since 4.19 percent in the week of Oct.
2, 2014. Last week, 30-year mortgage rates averaged 4.08
percent, Freddie Mac said.
    The yield on benchmark 10-year Treasury notes was 2.39
percent early on Thursday, compared with the 2.49 percent
reached on Dec. 1 which was the highest since July 2015,
according to Reuters data. 
    Interest rates on fixed-rate mortgages are referenced
against Treasury yields and trend in similar fashion but do not
move in lock step.
    The average interest rate on 15-year fixed-rate mortgages
reached its highest level since October 2014, while the average
rate on five-year adjustable-rate home loans advanced to its
highest since September 2013, according to Freddie Mac data.
    Mortgage rates and Treasury yields have risen since Donald
Trump's U.S. presidential election win on Nov. 8 as traders bet
his economic policies would result in a surge in federal
borrowing and a pickup in inflation.
    Meanwhile, investors widely expected the Federal Open Market
Committee, the U.S. central bank's policy-setting group, to
raise short-term interest rates by a quarter point at its policy
meeting next Tuesday and Wednesday. 
    "As rates continue to climb and the year comes to a close,
next week's FOMC meeting will be the talk of the town with the
markets 94 percent certain of a quarter-point rate hike,"
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. 8:
 Loan type      Latest week (pct)  Week ago (pct)  Year ago (pct)
 30-year fixed  4.13               4.08            3.95
 15-year fixed  3.36               3.34            3.19
 5-year ARM     3.17               3.15            3.03
 

    
 (Reporting by Richard Leong; Editing by Meredith Mazzilli)

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