Mortgage rates have jumped higher following the US presidential election, with expectations that it could lead to a slowdown in housing activity.
Long dated, 30-year fixed-rate mortgages averaged 3.94 per cent over the past week ending November 17, up from 3.57 per cent for the previous week, according to data from Freddie Mac, one of the agencies that purchases mortgages eligible for government backing.
The increase comes as government bond yields have risen sharply since Trump secured a surprise election win. The 30-year rate is still below the 3.97 per cent reached this time last year as the Fed was preparing to raise rates for the first time since the financial crisis.
“If rates stick at these levels, expect a final burst of home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity,” said Sean Becketti, chief economist, Freddie Mac.
15-year mortgage rates averaged 3.14 per cent, up from 2.88 per cent and 5-year adjustable rate mortgages averaged 3.07 per cent, up from 2.88 per cent.