Freddie Mac’s Primary Mortgage Market Survey recently reported that the average rate for a 30-year fixed-mortgage was 4.48% as of the week ending December 26. The week prior, the rate was 4.47% — resulting in a 0.7% increase. One year ago during the same week, 30-year fixed-rate mortgages were about 3.35%. The 15-year fixed-rate mortgages increased in one week by 0.7% as well — from 3.51% to 3.52%. The rate increases stem from the Federal Reserve’s announcement that it is tapering its $85-billion-per-month bond-buying program, effective next month.

This was the second consecutive week that rates have climbed. The average rate for a 30-year fixed-rate with conforming loan balance ($417,000 or less) during the week ending on December 20 increased to 4.64% from 4.62% the week prior, according to the Mortgage Bankers Association (MBA). The average rate for a 30-year fixed-rate mortgage with jumbo loan balance (greater than $417,000) increased to 4.63%, up from 4.61% from the previous week as well.

The MBA has also noted that the rate increases have resulted in the largest decline in mortgage application volume since November 2008. Overall mortgage application volume is 10% lower than the same time last year and mortgage purchase applications are almost 25% off the mark.