US mortgage interest rates push higher

Average U.S. mortgage rates for long-term loans rose in the week ending Thursday, the Federal Home Loan Mortgage Corp. said. The upward trend continued on renewed speculation that the U.S. Federal Reserve would soon begin to unwind an $85 billion per month stimulus program. In the week, average interest rates on 30-year fixed rate loans rose from 4.29 percent to 4.51 percent with an average 0.8 point, Freddie Mac said. Average rates for 15-year fixed rate loans rose from 3.39 percent to 3.53 percent with an average 0.8 point. Average interest rates for five-year adjustable rate mortgages rose from 3.1 percent to 3.26 percent with 0.7 point, Freddie Mac said. And one-year adjustable rate mortgages averaged 2.66 percent with 0.5 point in the week, unchanged from the previous week. One point is equal to 1 percent of the amount of the loan and is typically paid up front. It includes a corresponding discount on the loan's long-term interest rates. "June's strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed," said Frank Nothaft, vice president and chief economist at Freddie Mac. "The economy gained 195,000 jobs in June, above the market consensus forecast, while revisions to the prior two months added 70,000 on top of that," he said. In addition, hourly wages have risen by 2.2 percent over the last 12 months and represented the largest annual increase in nearly two years, Nothaft said.