Mortgage rates,The 30-year mortgage rate rose to its highest level in nearly two years, according to mortgage financing company Freddie Mac.
Mortgage rates climbed 0.22 percentage points to 4.51% for a 30-year, fixed-rate loan this week, the highest it has been since July 2011. Meanwhile, the average rate for a 15-year loan hit 3.53%, up 0.14 percentage points.
Two weeks ago, a sharp spike in rates of more than half a percentage point was blamed on hints by chairman Ben Bernanke that the Fed would soon start tapering off its purchases of up to $85 billion a month in bonds and mortgage-backed securities, a stimulus program designed to keep borrowing costs low.
This time, the culprit is the economy, said Keith Gumbinger, vice president of HSH.com, a mortgage information web site.
"Strengthening employment data put the bond and mortgage markets on the defensive again," he said. "The employment report for June, released last Friday, was firmer than expected, and upward revisions to April and May figures showed that hiring is on stronger footing than was previously believed."
It wasn't just the job gains that drove rates higher. Hourly wages also rose 2.2% over the past 12 months, the largest annual increase in nearly two years, according to Frank Nothaft, Freddie's chief economist.
The rate increases signal trouble for house hunters, however. A survey by online real estate company Trulia found that an increase in mortgage rates was the number one worry among 41% of consumers, even ahead of price increases.
Rates have risen more than a percentage point since early May, from 3.35% to 4.5%. That has added about $65 to monthly mortgage bills for every $100,000 a homeowner borrows. Combined with the 12% rise in home prices over the past 12 months, mortgage payments have gone up by about 25% for a typical homebuyer.
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