Average US rate on 30-year mortgage jumps to 3.87 percent

WASHINGTON (AP) — Average long-term U.S. mortgage rates rose sharply this week amid growing expectations that the Federal Reserve may soon raise its key short-term interest rate.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage jumped to 3.87 percent from 3.76 percent a week earlier.

At their mid-December meeting, Fed policymakers will consider raising the rate if the economy continues to grow at a strong enough pace to keep adding jobs and push annual inflation toward the 2 percent target, Fed Chair Janet Yellen told Congress on Wednesday.

Market expectations of a rate increase have brought plunging government bond prices and soaring yields.