Tax-cut deal helps to send mortgage rates back up

Mortgage rates are creeping back up, partly because of the tax-cut deal in Washington.

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.

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; it was 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.

Rates are rising because they tend to follow the trends set by government bonds, like the 10-year Treasury bond. Investors are selling those bonds, causing their interest rates to rise, because of the deal President Barack Obama and Republicans reached to hold off tax increases in 2011 and 2012 and cut taxes for most Americans.