Home Mortgage Refinancing Guide

The average of 30-year mortgage rates paid this week is up from last week’s 5.82% and tops last year’s 5.85%, according to the survey issued Thursday. Not since hitting 5.91% in the week ended April 14 have long-term mortgage financing costs been this high recently.

The mortgage rate does remain below the psychologically significant 6% threshold, however, with sales of existing and new homes on pace for annual records.

Mortgage Rates are rising in step with gains in the yield on the benchmark 10-year Treasury note, which also hit April highs atop 4.4% this week. They’ve since cooled, as the Federal Reserve fell short in expressing concern for immediate inflation risks in a statement released Tuesday, after the central bank lifted short-term interest rates for a 10th time in a little over a year.

The bond market isn’t entirely convinced that the Fed’s stance toward inflation is justified, however.

“The stronger-than-expected employment report coupled with upward revisions in job growth for the previous two months renewed the market’s fear of inflation,” said Frank Nothaft, chief economist at Freddie Mac.

“That’s because strong job growth can put upward pressure on wages — a key factor in inflation — that in turn, can drive long-term mortgage rates higher.”

The Fed acknowledges that features of the economy, namely wage increases, point to inflation risks down the road, policymakers have said, but they’re apparently not ready to raise interest rates more aggressively.

Refinance a Mortgage - Five Things You Need to Know

Mortgage Refinancing