The mortgage finance agency Freddie Mac said in a statement that U.S. 30-year mortgage rates increased from 4.08% last week to 4.13% in the week ended December 8, which reached the highest level since 4.19% in the week ended October 2, 2014.
The increased borrowing rate has a negative effect on mortgage refinancing, according the Mortgage Bankers Association. “Prime rates have gone up, especially on variable-rate mortgages, and that's why refinancing has gone down,” a professor of business economic said.
In the statement, Freddie Mac also said that the 15-year mortgage rates were up to 3.36% from 3.34% last week, reaching its highest level since October 2014. The 5-year adjustable mortgage rates rose from 3.15% to 3.17%, also reaching highest since September 2013. In addition, the yield of 10-year treasury notes decreased to 2.39% this week from 2.49% on December 1, which reached highest since July 2015.
“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,” Sean Becketti, the chief economist of Freddie Mac, said in the statement.
Both the mortgage rates and treasury yields rose after Donald Trump won the presidential election, because it is believed that his policies will cause increase in federal borrowing and inflation.