Long-term mortgage rates this week jumped to highs not seen since the summer of 2003, 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 for the week ended today, up from last week’s average of 6.24 percent. The average for the 15-year fixed mortgage gained slightly this week to 6 percent, up from last week’s average of 5.89 percent. Points on both the 30- and 15-year averaged 0.6.

The 30-year fixed has not been higher since Sept. 5, 2003, when it was 6.44 percent. The 15-year fixed has not been higher since July 5, 2002, when it averaged 6.03 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.03 percent this week, with an average 0.7 point, up from last week when it averaged 5.97 percent. The one-year Treasury-indexed ARM averaged 5.45 percent, with an average 0.8 point, up from last week when it averaged 5.34 percent. The one-year ARM has not been higher since Sept. 21, 2001, when it averaged 5.58 percent.

“Stronger-than-expected gains in the manufacturing and service industries — coupled with higher labor costs — ignited inflation concerns, which led to the rise in mortgage rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates.

“Although the signs are mixed, the housing industry is now beginning to shift into slower gear, and higher mortgage rates will only strengthen that change. However, we see no signs of a bursting bubble, but rather a return to a more normal pace of activity.”

In Bankrate.com’s survey, 30-year fixed mortgage rates climbed to their highest point since September 2003, with the average 30-year fixed rate mortgage reaching 6.45 percent, according to Bankrate.com’s weekly national survey of large lenders. The 30-year fixed mortgages in this week’s survey had an average of 0.34 discount and origination points.

The average 15-year fixed mortgage rate climbed by a similar amount, from 5.93 percent to 6.09 percent, and the average jumbo 30-year fixed rate bounded from 6.48 percent to 6.63 percent, Bankrate.com reported. Adjustable-rate mortgages increased as well, with the average 5/1 adjustable-rate mortgage rising from 6.02 percent to 6.13 percent, and the average one-year ARM hitting 5.76 percent, the highest since Dec. 2001.

While the Federal Reserve’s 14 interest-rate hikes since June 2004 have had little effect on long-term bond yields and fixed mortgage rates, the outlook for higher interest rates in key overseas markets was enough to send mortgage rates higher, according to Bankrate.com. As a result, 30-year fixed mortgage rates are now flirting with the 6.5 percent mark, a threshold last breached in July 2002.

A key factor in keeping fixed mortgage rates low in the years since has been the steady inflow of capital from places like Japan and Germany, where the amount of savings is much higher but interest rates are even lower, according to Bankrate.com. A 10-year government bond issued in Germany currently yields 3.6 percent, and in Japan, just 1.6 percent. By contrast, the 4.75 percent on a U.S. Treasury looks quite attractive. However, the concern is that foreign investors may lose their appetite for U.S. debt if higher interest rates become available on their own shores. Those concerns sent bond prices lower, and bond yields higher, over the past week, and mortgage rates are closely related to yields on long-term government bonds.

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

New York – 6.41 percent with 0.2 point

Los Angeles – 6.48 percent with 0.51 point

Chicago – 6.63 percent with 0.05 point

San Francisco – 6.52 percent with 0.3 point

Philadelphia – 6.34 percent with 0.39 point

Detroit – 6.49 percent with no points

Boston – 6.43 percent with 0.21 point

Houston – 6.45 percent with 0.57 point

Dallas – 6.43 percent with 0.49 point

Washington, D.C. – 6.3 percent with 0.72 point

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