Mortgage rates ticked up this week, putting the brakes on a historic streak of low borrowing costs that has helped lift the housing market and make homeownership more affordable for thousands of people who have refinanced.
Freddie Mac said that the 30-year fixed mortgage averaged 3.59 percent with an average 0.6 point, compared with 3.55 percent last week and 4.32 percent a year ago.
The 15-year fixed rate averaged 2.84 percent, up from last week when it averaged 2.83 percent but still down from 3.50 percent a year ago. It was the second consecutive weekly increase.
Tim Peterson, a mortgage consultant with Wintrust Mortgage in Bloomington, said that borrowers have barely noticed the increase. Rates remain within a few hundredths of a percentage point of all-time record lows, and the most recent increases would barely put a dent in the budgets of the average household.
"My customers have all had big smiles," he said.
He said that even a one-eighth percentage point increase on an average 30-year, $150,000 mortgage will add only about $8 to a monthly payment.
And compared with the days of double-digit rates, the latest increases are barely perceptible. Over the past several decades, the 30-year fixed mortgage has averaged about 8 percent.
Frank Nothaft, vice president and chief economist for Freddie Mac, said there's been a bit of upward pressure on rates because of stronger-than-expected employment gains, but no one is expecting dramatic increases.
Peterson and others say that with the economy still in triage mode, additional increases, if there are any, will be small at least through the end of the year.
"From everything I've seen and read, I think we'll stay pretty flat at least through the fourth quarter," Peterson said. "I think next year is going to be a really good market."