Industry News

Inflation jitters jack up mortgage rates

Fed: Rate increase more likely than not in '07

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Mortgage rates gained this week on investor speculation that the Federal Reserve will have to raise its target interest rate again to keep up with inflation, according to surveys conducted by Freddie Mac and Bankrate.com. In Freddie Mac's survey, the 30-year fixed-rate mortgage rose to an average 6.37 percent, up from last week when it averaged 6.3 percent, while the 15-year fixed-rate loan climbed to 6.06 percent from 5.98 percent last week. Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.5 on the 30- and 15-year loans. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.1 percent this week, with an average 0.6 point, up from 6 percent last week. The one-year Treasury-indexed ARM averaged 5.56 percent this week with an average 0.7 point, up from last week when it averaged 5.46 percent. "Renewed concern that inflation is still an issue put some upward pressure on bond yields, which generally tran...