Higher Treasury yields related to improvements in Europe's debt situation led to another rise in Freddie Mac's average 30-year mortgage rate in the week that ended Thursday, bringing it to a level half a percentage point above the record low set in mid-October.
This increase equates to about $50 more in monthly payments for a borrower with a $200,000 conventional loan, Freddie's chief economist, Frank Nothaft, said in a press release Thursday.
For mortgage production professionals, "the largest issue that you have from a hedging perspective … is declining volumes," said Les Parker, the president of the hedging consultancy Parker & Co., when asked about the recent climb in Treasury yields that pushed rates higher. "If you start getting fresh apps that you can't turn, then you have a problem," he said.
The 30-year rate was 4.61% during the week, up from 4.46% a week ago, but down from 4.81% a year earlier, Freddie said.
