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Mortgage rates climb again, for 8th week in a row

Holden Lewis
Little girl playing with building blocks in family room | Casezy idea/Shutterstock.com

Casezy idea/Shutterstock.com

This is getting ridiculous: Mortgage rates have risen eight weeks in a row.

Bankrate has been tracking mortgage rates every week since September 1985. This is only the fourth time that the 30-year fixed has risen eight weeks in a row. It happened in 1987 and 2004, and the benchmark rate went up for nine weeks in a row from September to November 2005.

Mortgage rates have gone up more than three-quarters of a percentage point since late September. This week, the 30-year, fixed-rate mortgage is at its highest level since September 2014.

SEARCH RATES: Don't despair. Find a mortgage rate that's fair.

Why this streak matters

There are still more than 1.5 million homeowners who would benefit from refinancing, according to the Urban Institute. That's roughly the number of homeowners who could reduce their mortgage rates by at least three-quarters of a percentage point.

But this long rate increase has locked out about 3 million homeowners who could have reduced their rates by that much, if only they had refinanced three months ago.

"The rise in interest rates means significantly fewer mortgages are going to be originated because we're going to choke off refinancing activity," says Laurie Goodman, co-director of the Urban Institute's Housing Finance Policy Center. According to the think tank, about 45 percent of homeowners could have benefited by refinancing earlier this year; now that applies to about 16 percent.

MORE: Read why it's important to refinance your mortgage now, if you're among the homeowners with a rate of 5 percent or higher.

This sustained rise in mortgage rates took housing economists by surprise. A couple of months ago, many of them were predicting that the 30-year, fixed-rate mortgage would be around 4.25 percent at the end of 2017. That happened about a year ahead of schedule.

"We reached that quickly, didn't we?" says Michael Becker, branch manager for Sierra Pacific Mortgage.

SEARCH RATES: You can still get a good deal today. Shop mortgage rates now.

Mortgage rates this week

The benchmark 30-year fixed-rate mortgage rose this week to 4.31 percent from 4.18 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 4.12 percent. Four weeks ago, the rate was 4.10 percent.

The last time the 30-year fixed rate was higher was Sept. 17, 2014, when it averaged 4.33 percent.

The 30-year fixed mortgages in this week's survey had an average total of 0.24 discount and origination points. Over the last 52 weeks, the 30-year fixed has averaged 3.79 percent. This week's rate is 0.52 percentage points higher than the 52-week average.

  • The benchmark 15-year fixed-rate mortgage rose to 3.56 percent from 3.42 percent.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.56 percent from 3.45 percent.
  • The benchmark 30-year fixed-rate jumbo mortgage rose to 4.36 percent from 4.19 percent.

In Bankrate's Sept. 28 survey, the 30-year fixed averaged 3.54 percent -- just above the record low of 3.5 percent. Since then, the benchmark rate has risen 77 basis points (a basis point is 0.01 percentage point).

Weekly national mortgage survey

Results of Bankrate.com's Dec. 21, 2016, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed 15-year fixed 5-year ARM
This week's rate: 4.31% 3.56% 3.56%
Change from last week: +0.13 +0.14 +0.11
Monthly payment: $817.51 $1,184.42 $746.46
Change from last week: +$12.56 +11.34 +$10.13

Lock rates pronto

With mortgage rates on an upward march for two solid months, most loan officers have pleaded with borrowers to lock their rates as soon as they can. That has been good advice, and it still is. Sure, rates could fall next week or the week after -- but they also could keep rising.

SEARCH RATES: Start out right by shopping for a mortgage now.

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