Mortgage rates continued their climb, with the 30-year reaching its highest level since April 2014, after the Federal Reserve increased its benchmark lending rate.
The average rate for a 30-year fixed mortgage was 4.3%, up from 4.16% last week, Freddie Mac said in a statement Thursday. The average 15-year rate climbed to 3.52%, the highest since January 2014, from 3.37%.
Federal Reserve policy makers last week increased short-term interest rates for the first time this year and projected more increases for 2017 as the economy strengthens. Mortgage rates have shot up since early November, tracking a jump in Treasury yields as investors bet that President-elect Donald Trump’s proposals will boost economic growth.
“A week after the only rate hike of 2016, the mortgage industry digested the Fed’s decision,” Sean Becketti, Freddie Mac’s chief economist, said in the statement. Following Fed Chair Janet Yellen’s speech on Dec. 14, “the 10-year Treasury yield rose approximately 10 basis points. The 30-year mortgage rate rose 14 basis points to 4.3%, reaching highs we have not seen since April 2014.”
Before the election, the average rate for a 30-year loan had been below 4% all year and was hovering near a record low. The monthly payment on a $300,000 loan has jumped to $1,485 from $1,354 at the start of November.