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Mortgage rates touch 4-year high as benchmark bonds take a hit

Which has been clobbered lately as investors fret about signs of rising inflation and a quickened pace of rate increases by the Federal Reserve. Rising rates can fuel selling in bonds, while climbing inflation can erode the fixed value of debt. That’s helped push yields, which rise as prices fall, to multiyear highs.

Read: The market is ‘finally getting the joke’ about the Fed: Guggenheim’s Minerd

So far, the surge in mortgage rates isn’t hurting the housing market. Demand remains sky-high and supply is limited. Many analysts even expect Americans to step up the pace of house hunting and mortgage applications, fearing a further climb in rates in the future.

“Last year, January business was strong for builders as post-election interest rate increases drove potential buyers into communities,” wrote Carl Reichardt, a homebuilding analyst for BTIG, in a recent summary. “We believe the same “off the fence” move is happening now with 30-year mortgage rates up 33 basis points year-to-date.

Key mortgage rates mixed for Thursday

30-year fixed mortgages

The average 30-year fixed-mortgage rate is 4.35 percent, unchanged over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 4.09 percent.

At the current average rate, you’ll pay $497.81 per month in principal and interest for every $100,000 you borrow.

You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be and see how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.77 percent, up 7 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $728 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.

When to close or fund mortgage if buying a new home?

Recently we visit a new home builder office and saw some beautiful model homes. They said it would take up 6 months to build once we pick a lot since those model homes are not for sale.