U.S. 30-year mortgage rates top 5 percent and keep rising

U.S. 30-year mortgage rates top 5 percent and keep rising

  05 Oct 2018

U.S. mortgage rates for 30-year loans have quickly overrun the 5 percent mark in the last three days, planting a flag on territory they haven’t touched since before the 2008 financial crisis.

Many would-be borrowers, however, think they are still down around 4.7 percent. Some could be in for a rude shock to find that payments on the home they thought they could afford just slipped out of reach.

“Generally we are seeing mortgage rates above 5 percent,” said Jerry Kaplan, executive vice president of capital markets with Cherry Creek Mortgage, Colorado’s largest mortgage lender.

Rates for a conforming 30-year mortgage before noon Friday were at 5.25 percent, he said. As recently as Tuesday, they were closer to 4.75 percent. The move has been swift, furious and largely unreported.

Freddie Mac puts out a weekly mortgage rate survey on Thursdays that media outlets use as the benchmark. It showed that rates on 30-year loans had dropped from 4.72 to 4.71 percent, following a five-week run that took rates up from 4.51 percent.

Press reports talked about how mortgage rates were finally cooling. What mortgage rates were actually doing was catching fire again, with the flames burning hotter than they did in January.

Kaplan said that pattern isn’t unusual. Mortgage rates tend to make swift moves up and slow moves down. And they can hold stable for long stretches, which was the case from February to September.

“The bond market now understands that the Fed intends to keep going a quarter point on its federal funds rate every 90 days until the economy slows down,” said Lou Barnes, a senior loan officer with Premier Mortgage Group in Boulder.

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