Mortgage rates were up for the fifth straight week, boosted in part by strength in existing-home sales and the economy, according to surveys conducted by Freddie Mac and Bankrate.com.
In Freddie Mac’s survey, the 30-year fixed-rate mortgage grew to an average 6.58 percent for the week ended today, up from last week’s average of 6.53 percent. The 30-year fixed has not been higher since the week ending June 20, 2002, when it averaged 6.63 percent.
The average for the 15-year fixed-rate mortgage this week is 6.21 percent, up from last week’s average of 6.17 percent. The 15-year fixed has not been higher since the week ending May 31, 2002, when it averaged 6.22 percent.
Points on both the 30- and 15-year fixed loans averaged 0.5.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.21 percent this week, with an average 0.6 point, up from last week when it averaged 6.16 percent. The one-year Treasury-indexed ARM averaged 5.68 percent, with an average 0.7 point, up from last week when it averaged 5.63 percent.
“Indications of a stronger economy gave rise to an increase in mortgage rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Consumer confidence and existing-home sales unexpectedly rose. Much of this strength is attributed to a healthy labor market, which translates into greater consumer spending. This should support an active housing market over the next few months.
“We expect mortgage rates to gradually rise throughout the year. A stronger labor market, coupled with moderation in house-price growth, means our outlook for overall housing conditions remains upbeat.”
In Bankrate.com’s survey, fixed mortgage rates increased again, with the average 30-year fixed-rate mortgage hitting 6.64 percent. This is the highest since the week of June 12, 2002. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.38 discount and origination points.
The average 15-year fixed-rate mortgage popular for refinancing stepped up to 6.27 percent, according to Bankrate.com. On larger loans, the average jumbo 30-year fixed rate climbed to 6.83 percent from 6.78 percent. Adjustable-rate mortgages increased too. The average 5/1 adjustable-rate mortgage jumped from 6.19 percent to 6.31 percent, and the average one-year ARM inched higher from 5.86 percent to 5.87 percent.
Mortgage rates continue to be driven by inflation and interest-rate expectations, Bankrate.com reported. This week, it was stronger-than-expected home sales data for March that reinforced notions of continued interest-rate hikes by the Federal Open Market Committee. With the housing market not coming apart at the seams, the Fed has the green light to continue raising interest rates to keep inflation from escalating. As a result, the yield on 10-year Treasury notes was propelled upward to 5.1 percent, the highest since June 2002. Since fixed mortgage rates are closely related to yields on long-term government bonds, mortgage rates are also at the highest levels since June 2002.
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 – 6.62 percent with 0.19 point
Los Angeles – 6.69 percent with 0.53 point
Chicago – 6.8 percent with 0.08 point
San Francisco – 6.72 percent with 0.28 point
Philadelphia – 6.5 percent with 0.65 point
Detroit – 6.72 percent with 0.03 point
Boston – 6.61 percent with 0.28 point
Houston – 6.61 percent with 0.56 point
Dallas – 6.66 percent with 0.48 point
Washington, D.C. – 6.51 percent with 0.72 point