Mortgage rates rose for the third consecutive week as positive economic news continued, according to surveys conducted by Freddie Mac and Bankrate.com.
In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 5.73 percent for the week ended today, up from last week when it averaged 5.66 percent. The average for the 15-year fixed-rate mortgage this week is 5.32 percent, up from last week when it averaged 5.25 percent. Points on both the 30- and 15-year averaged 0.4.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.26 percent this week, with an average 0.5 point, up from last week when it averaged 5.15 percent. The one-year Treasury-indexed ARM averaged 4.42 percent this week, with an average 0.6 point, up from last week when it averaged 4.39 percent. The last time the one-year ARM was higher was the week ended Aug. 2, 2002, when it averaged 4.45 percent.
“As the one-year ARM reaches its highest interest-rate level in almost three years, it comes as no surprise that the ARM share, based on number of applications for a mortgage, has fallen noticeably since the beginning of June,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “And even though long-term rates rose for the third consecutive week, they still remain below 6 percent – still relatively close to the phenomenally low rates we experienced in June of 2003.
“We believe that the housing industry, although poised to ease a bit, will still continue to bustle as the economy continues to expand steadily and long-term rates remain affordable.”
In Bankrate.com’s survey, mortgage rates increased slightly, rising for the third consecutive week and now sitting at a two-month high. The average 30-year fixed-rate mortgage inched higher from 5.76 percent to 5.78 percent, according to Bankrate.com. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.38 discount and origination points.
The 15-year fixed-rate mortgage, popular for refinancing, increased from 5.36 percent to 5.39 percent. The average rate for the jumbo 30-year fixed-rate mortgage nudged higher from 6 percent to 6.01 percent. Adjustable-rate mortgages increased at a faster pace, with the average 5/1 adjustable-rate mortgage jumping from 5.35 percent to 5.4 percent, and the one-year ARM rebounding from 4.71 percent to 4.78 percent.
The past week has produced reports on three consecutive days indicating lower-than-expected inflation, as well as Greenspan’s twice-annual Congressional testimony about the economy and monetary policy. Even though inflation readings came in lower than originally projected, and Alan Greenspan indicated more interest-rate hikes are in the offing, both had little effect on mortgage rates. Mortgage rates are closely related to yields on long-term government bonds. Yields on 10-year Treasury notes are the highest in more than two months, with the same being true for fixed mortgage rates, but only modest increases were seen in the past week.
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