mortgage

Mortgage rates climb on day Dow reaches 20,000

Stock analysts at the NYSE after Dow hits 20,000 | Yana Paskova/Getty Images

Mortgage rates rose for the first time this year as the Dow set a milestone by nudging above 20,000.

SEARCH RATES: Find a quote for a 30-year mortgage today.

Rates on mortgages had declined three weeks in a row. But the streak was snapped as investors went on a shopping spree for stocks. Bond prices sank, and that sent bond yields and mortgage rates soaring.

"The Dow crossed over the 20,000 mark. So that's kind of a psychological thing," says Elizabeth Rose, branch manager for Movement Mortgage, in Dallas. "I think what we're seeing is kind of a continuation of the (Donald) Trump rally. … It's mostly a continuation of excitement and confidence of the business community and where business is headed."

She doesn't intend that as a political statement. Rather, it's an explanation for the bullish attitude among business leaders.

"Whether it's controversial or not, if it's deemed positive for the business community," she says, we could see lower bond prices along with higher mortgage rates and stock prices.

Use Bankrate's mortgage calculator to see how much sooner you could pay off the loan by making extra payments.

Mortgage rates this week

The benchmark 30-year fixed-rate mortgage rose this week to 4.32 percent from 4.18 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 3.94 percent. Four weeks ago, the rate was also 4.32 percent. It hasn't been higher than that since mid-September 2014, when it hit 4.33 percent and then fell.

The mortgages in this week's survey had an average total of 0.28 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.81 percent. This week's rate is 0.41 percentage points higher than the 52-week average.

  • The benchmark 15-year fixed-rate mortgage rose to 3.51 percent from 3.41 percent.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.51 percent from 3.45 percent.
  • The benchmark 30-year fixed-rate jumbo mortgage rose to 4.31 percent from 4.24 percent.

SEARCH RATES: Moving up to a new place? Shop today for a home loan.

Weekly national mortgage survey

Results of Bankrate.com's Jan. 25, 2017, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed15-year fixed5-year ARM
This week's rate:4.32%3.51%3.51%
Change from last week:+0.14+0.10+0.06
Monthly payment:$818.48$1,180.37$741.85
Change from last week:+$13.53+$8.09+$5.52

A bet on infrastructure

Stock prices have been rising since the election of Donald Trump, on the theory that with a Republican in the White House, GOP members of Congress will finally approve infrastructure spending that will stimulate the economy.

Former President Barack Obama couldn't persuade Republicans to open the pocketbook for more infrastructure spending. Investors also seem cheered by what they believe will be Trump's business-friendly tax and regulatory policies.

Stocks and mortgage rates aren't the only financial numbers that are rising. House prices are going up, too. Prices for home resales rose 6 percent in 2016, according to the National Association of Realtors. In December, the home resale median price -- half sold for more -- was $232,200.

Similarly, the Federal Housing Finance Agency says house prices climbed 6.1 percent in the 12 months ending in November.

With house prices and mortgage rates rising, it's important to keep things in perspective, Rose says.

"Rate are still historically low," she says. "Even though they're rising, they're rising within a historically low range."

In Bankrate's weekly survey, the 30-year fixed has averaged 6.18 percent in the last 25 years.

SEARCH RATES: Know how much you can comfortably borrow? Now find a great mortgage deal.

advertisement


Connect with us