Long-term mortgage rates posted strong growth this week, hitting highs not seen since last July, as improving economic conditions both in the United States and abroad magnified inflation concerns, Freddie Mac and Bankrate.com reported today.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage climbed to an average 6.74 percent from 6.53 percent last week, and the 15-year fixed-rate mortgage jumped to 6.43 percent from 6.22 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

Adjustable-rate mortgages (ARMs) also rose to 11-month highs this week, with the five-year Treasury-indexed hybrid ARM growing to 6.37 percent from 6.24 percent last week and the one-year ARM up from 5.65 percent to 5.75 percent. Points on these loans averaged 0.5 and 0.7, respectively.

“Mortgage rates moved sharply upward this week, with rates on 30-year fixed-rate mortgages jumping more than 20 basis points, the largest upward movement in over three years,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “These moves parallel rising yields on Treasury securities, as concerns about inflation pressures and continuing strength of consumer and business spending have dimmed hopes for an interest-rate cut.”

Nothaft added that “higher mortgage rates may weigh on the housing market’s gradual recovery,” and the high inventory of unsold new homes is “putting downward pressure on construction and home prices.”

In Bankrate.com’s survey, mortgage rates climbed to an 11-month high, with the average 30-year fixed mortgage rate hitting a 10-month high of 6.84 percent. Discount and origination points on these loans averaged 0.27.

The average 15-year fixed-rate mortgage popular for refinancing increased by a similar amount, to 6.53 percent, Bankrate.com reported. With larger loans, the average jumbo 30-year fixed rate soared to 7.12 percent. Adjustable-rate mortgages were no different, with the average one-year ARM nosing higher to 6.19 percent and the 5/1 ARM bounding up to 6.67 percent.

Bankrate.com noted that mortgage rates staged a significant increase over the past week, and it came in the absence of any major economic data. Instead, rising interest rates overseas proved to be the catalyst, even though the Federal Reserve stands pat here at home. Higher interest rates and strong economic growth in other parts of the world could force Uncle Sam to pay higher yields to attract funds from foreign investors, according to Bankrate.com. For now, the yield on 10-year Treasury notes is very close to the 5.25 percent fed funds rate set by the Federal Reserve, reflecting the expectation of a hands-off Fed.

Fixed mortgage rates have increased more than one-half percentage point since mid-May, Bankrate.com reported. At the time, the average 30-year fixed mortgage rate was 6.32 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,023. With the average 30-year fixed rate now 6.84 percent, the same loan originated today would carry a monthly payment of $1,080.

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 – 6.86 percent with 0.07 point

Los Angeles – 6.9 percent with 0.43 point

Chicago – 6.91 percent with 0.06 point

San Francisco – 6.82 percent with 0.47 point

Philadelphia – 6.9 percent with 0.21 point

Detroit – 6.8 percent with 0.01 point

Boston – 6.83 percent with 0.05 point

Houston – 6.89 percent with 0.46 point

Dallas – 6.79 percent with 0.48 point

Washington, D.C. – 6.74 percent with 0.44 point

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