Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage rose to 4.08 per cent this week from 4.02 per cent a week earlier. The rate on 15-year fixed-rate mortgages increased to 3.24 per cent from 3.21 per cent.
Mortgage rates have increased in recent weeks, in the midst of the spring home buying season, as the economy has shown signs of improvement.
A year ago, the average 30-year rate was 4.12 per cent; the 15-year average was 3.22 per cent.
Data issued Tuesday showed that home prices increased at a solid clip in April, led by double-digit gains in Denver and San Francisco. The Standard & Poor's/Case-Shiller 20-city home price index rose 4.9 per cent in April from 12 months earlier, roughly the same annual pace as March.
Strong job growth and low mortgage rates have prompted greater demand for housing, boosting home values. The continued gains are at roughly double the pace of wage growth, but current levels appear more manageable than the double-digit home price increases seen during parts of 2013 and 2014.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 per cent of the loan amount.
The average fee for a 30-year mortgage declined to 0.6 point from 0.7 point last week. The fee for a 15-year loan was unchanged at 0.6 point.
The average rate on five-year adjustable-rate mortgages ticked up to 2.99 per cent from 2.98 per cent; the fee remained at 0.4 point. The average rate on one-year ARMs rose to 2.52 per cent from 2.50 per cent; the fee was unchanged at 0.3 point.