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WASHINGTON (AP) — Fixed mortgage rates rose this week by the most in four months.
The average rate on the 30-year loan increased to 4.60 percent, up from 4.51 percent a week ago, Freddie Mac said Thursday. It hit its lowest level of the year three weeks ago, at 4.49 percent.
The average rate on the 15-year fixed mortgage, a popular refinancing option, rose to 3.75 percent. It reached its low point of the year two weeks ago, at 3.67 percent.
Rates typically track the yield on the 10-year Treasury note, which has been rising. And mortgage rates could rise further now that the Federal Reserve’s $600 billion bond buying program has ended.
The Fed has purchased around $75 billion worth of bonds each month since November. That drove the yield on the 10-year Treasury note lower than 3 percent this spring. As a result, rates on mortgages and other loans also fell.
Still, low mortgage rates and plummeting home prices have done little to boost the troubled housing market. Tougher lending standards and bigger down payment requirements have prevented many people from taking advantage of the ultra-low rates. Many people who can qualify are holding off, worried that prices have yet to bottom out.
Most economists say home prices will keep falling through the rest of the year. Many forecasts don’t anticipate a rebound in prices until at least 2013.