Dec. 31--The average 30-year fixed-rate mortgage has crept back above 4 percent for the first time in five months, according to Freddie Mac.
Following the Federal Reserve's decision to hike the federal funds rate by 0.25 percent on Dec. 16, mortgage rates initially dipped from 3.97 percent to 3.96 percent. But in the last week of 2015, they climbed to 4.01 percent -- the first time they've been above 4 percent since July.
Freddie Mac Chief Economist Sean Becketti attributed the jump to increased consumer confidence, which drove up treasury yields and increased the return that lenders require.
He said in a news release that Freddie Mac expects the 30-year fixed-rate mortgage to average 4.7 percent by the fourth quarter of 2016, up from 3.9 percent in the fourth quarter of 2015. That rate does not include any loan-level price adjustments that lenders layer atop rates to lessen their credit risk.
Fed Chair Janet Yellen has said that future hikes in the federal funds rate will be "data-based," but most market observers expect a series of additional hikes in 2016.
kjanssen@tribpub.com
