9 percent more expensive for the same home

The average rate on a typical 30-year fixed-rate mortgage has climbed for four weeks, to an average of 4.61 percent last week, according to Freddie Mac, pushing the monthly cost of a $300,000 loan to $1,540, from $1,462. The rate had dropped to a record low 4.17 percent in the week ended Nov. 11 amid speculation that a bond purchasing program by the Federal Reserve would restrain yields.

Higher loan rates “won’t be fun” for a fragile housing market, said Scott Simon, head of mortgage bonds at Newport Beach, California-based Pacific Investment Management Co., manager of the world’s biggest bond fund. “If you were looking at buying a house a few weeks ago, the same house, to you, looks as much as 9 percent more expensive,” he said.

Rates are still low by historic standard, making monthly payments much more attractive than in years past when 6% was considered a good rate. If rates rise to just 5.5%, the monthly costs of a $300,000 loan will go from $1,540 to $1,703.

As always, feel free to call or email me with questions.

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