Duane Michael Wagner
Mortgage Rates in the U.S. Climb to Highest in a Year
U.S. mortgage rates rose to their highest levels in a year as reports showed the housing market and economy strengthening, signaling to bond investors that the Federal Reserve may reduce efforts to push down borrowing costs.
The average rate for a 30-year fixed mortgage jumped to 3.81 percent in the week ended today, from 3.59 percent, McLean, Virginia-based Freddie Mac (FMCC) said in a statement. The average 15-year rate increased to 2.98 percent from 2.77 percent.
The economy is improving as the housing market rebounds. Photographer: Patrick T. Fallon/Bloomberg
May 22 (Bloomberg) –- Federal Reserve Chairman Ben S. Bernanke offers his views on the central bank’s monetary policy, exit strategy and the U.S. economy. Bernanke testifies before the Joint Economic Committee in Washington. Representative Kevin Brady, a Texas Republican and chairman of the committee, also speaks. (Excerpts. Source: Bloomberg)
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Yields (USGG10YR) for 10-year U.S. Treasuries touched 2.23 percent yesterday, the highest level since April 5, 2012, amid speculation the Fed will reduce asset purchases. Federal Reserve Chairman Ben S. Bernanke told Congress last week that the central bank could scale back stimulus efforts if theemployment outlook shows sustainable improvement. Home-loan interest rates increased for a fourth week after hovering close to record lows early this month.
“Backing off on quantitative easing sparks fears among investors because cheap, long-term credit is good for growth,” Barney Hartman-Glaser, assistant finance professor at Duke University in Durham, North Carolina, said in a telephone interview yesterday. “At the same time, if Bernanke feels that we don’t need cheap, long-term credit to fuel growth, then that means we’re returning to an economy that can support itself.”