Mortgage rates hit 7-year high

WASHINGTON — Treasury yields have been steadily rising, and spiked this week, sending mortgage rates to the highest level in years.

Freddie Mac says a 30-year fixed-rate mortgage averaged 4.61 percent this week, matching the highest level since May 19, 2011. A year ago, 30-year rates averaged 4.02 percent.

Mortgage rates loosely follow the rise and fall of 10-year Treasury yields, now hovering just shy of 3.1 percent, near a five-year high.

“Healthy consumer spending and higher commodity prices spooked bond markets and led to higher mortgage rates over the past week,” said Sam Khater, Freddie Mac’s chief economist.

“Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season,” Khater said.

Even so, Freddie Mac said this year’s higher rates have not yet caused much of a ripple in the strong demand levels for buying a home seen in most markets, but inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.

A 15-year fixed rate mortgage averaged 4.08 percent this week, up from 4.01 percent last week. A five-year, adjustable-rate mortgage averaged 3.82 percent, up from 3.77 percent last week.

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