ShareThis Page
Business Headlines

Mortgage rates leap to 7-year highs; 30-year at 4.90 percent

| Thursday, Oct. 11, 2018, 6:27 p.m.
FILE- This Wednesday, Oct. 3, 2018, file photo shows a home offered for sale in the Atlanta suburb of Roswell, Ga. On Thursday, Oct. 11, Freddie Mac reports on the week’s average U.S. mortgage rates. (AP Photo/John Bazemore, File)
FILE- This Wednesday, Oct. 3, 2018, file photo shows a home offered for sale in the Atlanta suburb of Roswell, Ga. On Thursday, Oct. 11, Freddie Mac reports on the week’s average U.S. mortgage rates. (AP Photo/John Bazemore, File)

WASHINGTON — Long-term U.S. mortgage rates leaped this week to their highest levels in seven years amid global anxiety over rising interest rates that has gripped financial markets.

Costs for would-be homebuyers are climbing. Mortgage buyer Freddie Mac said Thursday the rate on 30-year, fixed-rate mortgages jumped to an average 4.90 percent this week from 4.71 percent last week. That’s the highest level for the benchmark rate since April 2011. A year ago, it stood at 3.91 percent.

The average rate on 15-year, fixed-rate loans rose to 4.29 percent this week from 4.15 percent last week.

The Federal Reserve recently signaled its confidence in the economy by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end.

It was the central bank’s third increase in short-term interest rates this year, with one more expected before year’s end. Strong economic data and a positive outlook from Fed officials have spurred a sell-off in U.S. Treasury bonds, especially longer-term bonds, stoking concerns over even higher interest rates.

As anxiety over higher rates spiraled, financial markets around the world suffered a massive sell-off. U.S. stocks marked their biggest drop since February on Wednesday, as the Dow Jones industrial average slid 831 points. Stocks sank again on Wall Street on Thursday morning.

President Donald Trump stepped in to assert that the Fed “is making a mistake” with its rate increases and accused the central bank of having “gone crazy.”

Interest rates on Treasury bonds have climbed to the highest levels in seven years as their prices have dropped. The yield on the key 10-year Treasury note, which tends to influence mortgage rates, was at 3.16 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.

The average fee on 30-year fixed-rate mortgages rose to 0.5 point from 0.4 point last week. The fee on 15-year mortgages also increased to 0.5 point from 0.4 point.

The average rate for five-year adjustable-rate mortgages jumped to 4.07 percent from 4.01 percent last week. The fee was unchanged at 0.3 point.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me