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Mortgage Rates Rise Sharply, Highest Level In Almost 2 Years

Mortgage rates, or interest rates on home loans, jumped from last week reaching the highest level since March 2020, according to mortgage provider Freddie Mac (FMCC.OB).

Releasing the results of its primary mortgage market survey, Freddie Mac said that the 30-year fixed-rate mortgage or FRM averaged 3.45 percent for the week ending January 13, 2021, up from 3.22 percent last week. A year ago at this time, the average rate was 2.79 percent.

The 15-year FRM this week averaged 2.62 percent, up from 2.43 percent last week. A year ago at this time, the 15-year FRM averaged 2.23 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage or ARM averaged 2.57 percent, up from last week when it averaged 2.41. It was 3.12 percent a year ago.

"Mortgage rates rose across all mortgage loan types, with the 30-year fixed-rate mortgage increasing by almost a quarter of a percent from last week," said Sam Khater, Freddie Mac's Chief Economist. "This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future."

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