Mortgage rates rise to highest level of the year so far

Mortgage rates jumped this week after the yield on the 10-year Treasury note hit its highest level in two months. The increase in rates spurred a drop-off in refinances, but purchases are still up.

The 10-year Treasury yield, which mortgage rates tend to follow, reached its highest level since March 6 after a weeklong sell-off in European bonds.

"Obviously, rates are up. The real question is what is driving it right now," says Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. "It's not necessarily U.S. growth inflation. It's what's happening in the European markets."

Dissipating worries over deflation in the eurozone prompted a global sell-off in government bonds.
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30 year fixed rate mortgage -- 3 month trend

    The benchmark 30-year fixed-rate mortgage rose to 3.99 percent from 3.86 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.37 percent. Four weeks ago, it was 3.82 percent. The mortgages in this week's survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.08 percent. This week's rate is 0.09 percentage points lower than that 52-week average.
    The benchmark 15-year fixed-rate mortgage rose to 3.17 percent from 3.07 percent.
    The benchmark 5/1 adjustable-rate mortgage rose to 3.19 percent from 3.11 percent.
    The benchmark 30-year fixed-rate jumbo rose to 4.07 percent from 3.97 percent


Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-050715.aspx