Mortgage rates on the rise, reach two-year high
Posted on Thursday, June 27, 2013 at 10:26:39 AM
Mortgage rates are rising rapidly and are approaching recent highs. The increase is in response to the Federal Reserve's statement on Wednesday, June 19, saying that it could begin reducing the bond purchase program this year.
Due to these concerns, the average rate for a 30-year fixed mortgage rose to its highest in nearly two years, now at 4.46 percent, according to a report from Freddie Mac. The 15-year FRM hit 3.5 percent, according to the GSE's Primary Mortgage Market Survey for the week ending June 27.
The increase in rates continues a trend throughout the entirety of 2013.
"Following Fed chief Bernanke's remarks on June 19 about the possible timing of reduced bond purchases, Treasury bond yields jumped over the week and mortgage rates followed," said Frank Nothaft, vice president and chief economist for Freddie Mac, in a statement.
The previously low interest rates had reinvigorated the housing market, and provided a lift for those looking for residential financing. Despite the rise, buying a house still remains an affordable and viable task. On the whole, buyers shouldn't be overly concerned just yet.
Nothaft added that the higher rates might reduce some market activity, but not on the level of buyer affordability as a whole. Home sales shouldn't suffer as a result of the current mortgage rates.