Rates on fixed mortgages edged up this week, inching further away from the lowest level in decades.
Freddie Mac said Wednesday the average rate for 30-year fixed loans rose to 4.40 percent from 4.39 percent last week. Two weeks ago, the rate hit 4.17 percent, the lowest on records dating to 1971.
The 15-year loan also increased, to 3.77 percent from 3.76 percent. It hit its lowest point since the survey began in 1991 two weeks earlier at 3.57 percent.
Mortgage rates rose because Treasury yields have increased. Mortgage rates tend to track bond yields.
The yields pulled away from their yearly lows in the last two weeks as strong data eased economic fears and traders dumped bonds they bought before the Federal Reserve’s massive Treasury-buying program to boost the economy. Yields have fallen in recent days on worries over Ireland’s debt crisis and tensions between North and South Korea.
A slew of economic reports Wednesday support an improving economy, which could convince investors to shift money into riskier investments and away from safer Treasurys, driving up their yields.
Mortgage rates had been at or near historic lows since April, when Greece’s debt problems fueled jittery investors to pour money into Treasurys.
The low rates did little to spur home sales, though, because would-be homebuyers are too concerned about their jobs or can’t qualify for a mortgage. Others can’t sell their home before buying another.
But the Mortgage Bankers Association said Wednesday that applications for mortgages rose to the highest level since May last week from the previous week. However, the previous week included the Veterans Day holiday, and the survey didn’t adjust for the extra day in the latest week.
To calculate averages, Freddie Mac collects mortgage rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly even within a day.
Rates on five-year adjustable-rate mortgages averaged 3.45 percent, up from 3.40 percent. The five-year hit 3.25 percent two weeks ago, the lowest rate on records dating back to January 2005.
Rates on one-year adjustable-rate home loans slipped to 3.23 percent from 3.26 percent.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.
The average fee for 30-year mortgage in Freddie Mac’s survey was 0.8 point. It was 0.7 point for 15-year fixed loans and it was 0.6 point for five-year and one-year mortgages.
