[NEW YORK] Mortgage rates for 30-year loans rose to the highest since October after Federal Reserve Chair Janet Yellen reiterated plans to increase borrowing costs this year and the likelihood of a Greek exit from the euro region faded.
The average rate for a 30-year fixed mortgage was 4.09 per cent, up from 4.04 per cent last week, Freddie Mac said in a statement on Thursday. The average 15-year rate climbed to 3.25 per cent from 3.2 per cent, according to the McLean, Virginia- based mortgage-finance company.
Ms Yellen told members of the House Financial Services Committee on Wednesday that the Fed is likely to raise the benchmark interest rate for the first time in almost a decade, assuming its forecasts for stronger growth and lower unemployment are realized. The probability that the increase will come as soon as September helped boost mortgage rates, said Keith Gumbinger, vice president of loan-research site HSH.com.
"Markets are preparing themselves for that eventuality, and that makes it harder for rates to fall," he said.
Foreign demand for US Treasuries, which helped push down mortgage rates last week, declined as concerns that Greece would leave the euro area lessened, Mr Gumbinger said. After several rounds of negotiations, Greek Prime Minister Alexis Tsipras this week accepted a bailout deal for the debt-ridden country.