By Janna Herron
AP Real Estate Writer
NEW YORK (AP) — Homeowners who delayed locking in super-low mortgage rates — think close to 4 percent for a 30-year fixed — may have waited too long.
Rates are creeping back up, in part because of the tax-cut deal in Washington.
Now those in the market to buy or refinance have to decide whether to take what’s available or risk making the same mistake twice.
Freddie Mac, the government-backed company that buys and sells mortgages, said Thursday that average rates on 15- and 30-year fixed loans increased sharply from last week. It was the fourth straight weekly rise. Fixed rates had been the lowest in decades.
“People thought for a while that rates would fall below 4 percent, and they hedged on that,” said New York mortgage broker and banker Andrew Toolin.
Rates are rising because they tend to follow the trends set by government bonds, like the 10-year Treasury bond.
Even though they’re rising, mortgage rates remain at extraordinarily low levels by historical standards.
The average rate on the 30-year mortgage rose to 4.61 percent from 4.46 percent last week. It hit 4.17 percent a month ago, the lowest level in the 40 years that comparable records have been kept.
The rate on a 15-year fixed loan, a popular refinancing option, rose to 3.96 percent. Rates hit 3.57 percent last month, the lowest since 1991.
The opportunity to refinance a home loan at a fixed rate of less than 5 percent is still a pretty good deal, and even better for those who are trapped in an adjustable-rate mortgage.
Still, for those homeowners who already have low rates or are thinking about a second refinancing, a quarter-point to half-point change over the month could be crucial.
Many have already refinanced into lower rates in the last year or so at 5 percent or below. They would need rates to be at least 1 percentage point lower to make a refinance financially worthwhile.
Some who missed their opportunity acknowledged they may have gambled — and miscalculated.
Lisa Herman, a project manager at a financial institution in Philadelphia, said she learned from her mistake. She is trying to refinance her row house in Philly’s Center City, while also buying a 1950s cottage home near her family in Traverse City, Mich.
Four weeks ago, she could have gotten 4.25 percent on her refinance and 4.875 on her purchase. She waited, betting rates would go back down or at least stay flat. But they edged up.
A week later, she folded and locked in 4.378 percent and 5.125 percent. The price for her hesitation: about $50 a month.
“I got a little greedy and I lost,” Herman said.
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