Eyeing the prospect of a more vibrant economy in 2017 and more rapidly rising prices, lenders are hiking interest rates, experts say. Economists are predicting home loan rates of 4.5 percent by the end of 2017.

Freddie Mac’s latest mortgage rate survey posted an average of 4.13 percent for benchmark 30-year fixed rate home loans – the largest interest rate for that loan in 2016.

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year loan jumped to 4.13 percent on December 8 from an average of 4.08 percent a week earlier. It was the sixth week in a row that rates moved higher. A year ago, 30-year loans averaged 3.95 percent.

The 4.13 percent rate hike boosts the typical monthly payment on a $200,000 mortgage about $6 a month.

15-year fixed rate loans averaged 3.36 percent, up from 3.34 percent a week earlier. A year ago, at this time, the 15-year fixed rate loans averaged 3.19 percent.

“The 10-year Treasury yield dipped this week following the release of the Job Openings and Labor Turnover Survey,” said Sean Becketti (left), Freddie Mac’ chief economist. The average 30-year mortgage rate started the month 18 basis points higher than this time last year, he said.

Long-term home loan rates are not set by the Fed. They are tied to the yield on 10-year U.S. Treasury bonds. 10-year Treasury bond yields have risen sharply to 2.35 percent from 1.6 percent in the third quarter of 2016, pushing loan rates higher.

“As rates continue to climb and the year comes to a close, the December 13-14 Fed meeting will be the talk of the town with the markets 94 percent certain of a quarter of one percent rate hike,” Becketti said.

Higher interest rates have caused refinancing activity to plummet 28 percent in November. However, home loan applications for home buyers are still marching along at a strong pace because many “fence sitters” are purchasing now to avoid higher rates later.