Image source: Scott Lewis. Republished under CC BY 2.0.

Mortgage rates were broadly unchanged on Thursday. The average 30-year mortgage rate is 3.87%, which equates to a $469.95 monthly payment per $100,000 borrowed, or $22.58 higher than the equivalent payment would have been a month ago.

If you were to opt for a shorter term, the average 15-year mortgage rate is 3.01%, which equates to a $691.06 monthly payment per $100,000 borrowed, or $14.82 higher than the equivalent payment would have been a month ago.

Rate (National Average)

Today

One Month Ago

30-year fixed jumbo

4.43%

4.43%

30-year fixed

3.87%

3.47%

15-year fixed

3.01%

2.70%

30-year fixed refi

3.93%

3.49%

15-year fixed refi

3.07%

2.72%

5/1 ARM

3.24%

2.99%

5/1 ARM refi

3.52%

3.13%

5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED 5-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.

Mortgage rates were unchanged on Thursday, but expectations for a December rate hike pushed bond yields to a new high

The Federal Reserve chairwoman delivered her testimony On The Economic Outlook to Congress on Thursday, and it was enough to convince investors that an interest rate hike is a virtual certainty at next month's meeting of the Federal Open Market Committee. Based on prices in the federal funds futures market, the probability of a rate increase is now 96%, up two percentage points compared to yesterday, and 12 points higher than it was on election day. There was a conspicuous lack of any reference to the election result in chair Yellen's remarks.

In that context, it isn't surprising that the 10-year Treasury yield reached its highest level of the year today, at 2.30%, according to data from Bloomberg. That's nearly a full percentage point above the July low of 1.36%. The 10-year Treasury yield is an instrumental input in setting mortgage rates.

It remains to be seen whether or not rising rates will affect homebuying activity; however, homebuilders plowed ahead last month, as housing starts rose to an annualized rate of 1.32 million – the highest rate in nine years! The annualized rate for the key single-family home segment rose 10.7%, to 869,000, following an 8.4% increase in September.

Nevertheless, the outlook for future demand is more muted. The annualized rate for housing permits inched forward just 0.3%.