From the latimes.com:
Mortgage rates have risen half a percentage point since setting record lows last fall, and many economists expect them to continue rising for the foreseeable future.
The increase, a reaction to the improving economy and housing markets, could fuel already hot housing markets as potential home buyers look to seal a deal before rates rise any further.
“I think rates will drift slowly higher,” said economist Christopher Thornberg, head of the West L.A. consulting firm Beacon Economics. The increases might add as much as 1 percentage point to mortgage rates by the end of next year, he said. “But within these ranges, home prices are still cheap compared to incomes and apartments.”
In a weekly survey of what lenders are offering to solid borrowers, Freddie Mac reported Thursday that the average rate for a 30-year fixed loan rose from 3.59% last week to 3.81% early this week. It was the highest in more than a year, contrasting with the record low of 3.31% set last fall.
The rates remain extraordinarily low by historical standards. The typical rate exceeded 16% during inflationary times in 1981 and 1982, Freddie Mac’s records show, and the annual average topped 8% as recently as 2000.
The higher rates have arrived as rising home prices and the slowly improving economy also are delivering some good news for mortgage borrowers, who are being offered a wider range of loans on somewhat easier terms these days. That’s allowing buyers without 20% down payments to avoid private mortgage insurance, and family members to sign on as co-borrowers without living in the homes, mortgage brokers say.
Easing lending standards have made it more possible for homeowners to tap into their rising equity. And home equity lines of credit, hard to come by after the housing crash, are now offered again by many lenders reassured by recent increases in home prices.