Mortgage rates have reached their highest point in a year and seem to be slightly increasing.
The average rate for a 30-year fixed rate mortgage for loans under $417,500 reached 3.9% at the end of May, according to the Mortgage Bankers Association. This is the highest rate since May 2012, and up from 3.59% from the first week in May 2013.
The 15-year fixed-rate mortgage also spiked, up 0.21% to 2.98%.
Even if rates continue to increase, they won’t go very far too fast, according to Frank Nothaft, Freddie Mac’s chief economist.
“We’re seeing the first steps in a gradual uptick,” Nothaft said.
As rates increase, the number of loan refinance applications has declined since many refinances won’t save much for current homeowners. Refi applications fell 12%, according to the Mortgage Bankers Association. However, rates will likely have to rise much more to have a big impact on homebuyers. The rate increases over the past month have only added about $20 to monthly mortgage payments for every $100,000 borrowed.