Stronger than expected economic news pushed mortgage rates up for the eighth consecutive week, and sent the one-year adjustable-rate mortgage to highs not seen in more than three years, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 6.31 percent for the week ended today, up from last week’s average of 6.15 percent. The average for the 15-year fixed-rate mortgage is 5.85 percent, up from last week when it averaged 5.69 percent. Points on both the 30- and 15-year averaged 0.5.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.76 percent this week, with an average 0.5 point, up from last week when it averaged 5.63 percent. The one-year Treasury-indexed ARM averaged 5.09 percent, with an average 0.5 point, up from last week when it averaged 4.91 percent. This is the highest the one-year ARM has been since March 29, 2002, when it was 5.11 percent.

“Based on preliminary GDP figures for the third quarter, the economy is expanding faster than had been expected,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Originally, the markets had lowered economic expectations for the third quarter because of the impact of the hurricanes. So the news of an economy growing at such a strong pace gave financial markets a jolt and added to the impetus that caused mortgage rates to rise again this week.

“It’s interesting to note that although mortgage rates have been rising lately, rates are still an average of about 2 percent less than other interest rates – such as car loans – made by lending institutions, according to Bankrate.com.”

In Bankrate.com’s survey, mortgage rates soared to a level last seen in May 2004 as economic growth exceeded expectations and the Federal Reserve increased interest rates for the 12th consecutive time. The average 30-year fixed-rate mortgage increased from 6.24 percent to 6.37 percent, according to Bankrate.com’s weekly national survey of large lenders. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.33 discount and origination points.

Bankrate.com reported that the average 15-year fixed mortgage rate jumped as well, rising from 5.79 percent to 5.91 percent, while the average jumbo 30-year fixed-rate climbed to 6.54 percent from 6.41 percent last week. Adjustable-rate mortgages followed suit, with the average 5/1 adjustable-rate mortgage notching higher from 5.82 percent to 5.9 percent, while the average one-year ARM bounded higher from 5.21 percent to 5.35 percent.

The initial estimate of third-quarter economic growth came in much stronger than expected at a 3.8 percent annualized pace, Bankrate.com reported. This comes despite higher oil and energy costs and despite the destruction along the Gulf Coast from Hurricanes Katrina and Rita. The surprisingly strong economic performance underscores the Fed’s efforts to raise interest rates, which they did yet again this week. The economic performance and the outlook for higher interest rates are pushing yields on government bonds higher. Fixed mortgage rates are closely related to yields on long-term government bonds. The spike in fixed mortgage rates could spell trouble for the housing market if present levels are sustained. Low mortgage rates have contributed to the strong performance of the housing market by giving home buyers more borrowing power.

The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:

New York – 6.36 percent with 0.21 point

Los Angeles – 6.42 percent with 0.46 point

Chicago – 6.46 percent with 0.05 point

San Francisco – 6.48 percent with 0.2 point

Philadelphia – 6.25 percent with 0.32 point

Detroit – 6.29 percent with 0.25 point

Boston – 6.31 percent with 0.11 point

Houston – 6.38 percent with 0.5 point

Dallas – 6.42 percent with 0.4 point

Washington, D.C. – 6.28 percent with 0.74 point

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