WASHINGTON, June 6, 2013 /PRNewswire-USNewswire/ -- The home mortgage interest rate party isn't over, but signs that the hosts are eyeing the clock are making revelers anxious.
Interest rates for fixed rate 30-year loans are up 14% since May, according to mortgage giant Freddie Mac, likely driven by signals from the Federal Reserve that it will taper off its policy of buying up to $85 billion a month in mortgage-backed securities and Treasury bonds. The Fed's actions are seen as the result of an improving U.S. economy, with the private market growing strong enough to support more of the housing market.
But without government guarantees, lenders will want higher returns, and that has moved interest rates on fixed-rate 30-year mortgages from 3.3% in early May to 3.81%., the current rate. Fifteen year loans have moved to an average 2.98.
Doug Lebda, chief executive of mortgage shopping site LendingTree believes rates will be volatile throughout 2013, moving both up and down, but with the interest rate trajectory definitely upward.
As for record low mortgage rates of recent years, "It's unlikely that rates will ever be that low again," said Doug Duncan, Fannie Mae's chief economist.
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