Mortgage rates climbed this week after falling for five straight weeks as concerns over cheap money’s effect on inflation pushed investors to put their money into stocks, Freddie Mac reported today.

Rates on mortgages are closely tied to yields on Treasury bonds, and when investors shy away from bonds, that drives bond prices down and their yields up, which pushes mortgage rates higher.

The average rates on 30-year fixed mortgages rose 20 basis points in the last week, growing from 5.48 percent to 5.68 percent, and the average 15-year fixed mortgage was up 22 basis points, from 4.95 percent to 5.17 percent.

A year ago, the 30-year fixed averaged 6.34 percent and the 15-year averaged 6.06 percent, Freddie Mac reported.

This week, points, or fees that lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

According to Freddie Mac, adjustable-rate mortgages (ARMs) also increased this week, although not as much as fixed rates. The average five-year Treasury-indexed hybrid ARM gained from 5.13 percent to 5.32 percent, compared with 6.04 percent a year ago. The one-year Treasury-indexed ARM edged up from an average 4.99 percent last week to 5.05 percent, and was 5.54 percent this time last year.

Frank Nothaft, Freddie Mac’s vice president and chief economist, said that “the movement in fixed mortgage rates was broadly consistent with the movements of Treasury bonds over the week.”

According to Bankrate.com, which also conducts a mortgage-rate survey each week, much of the reversal in home loan interest rates in the past week can be attributed to a “24-hour span that saw the equity and bond markets each do an about-face,” coinciding with the Federal Reserve’s 75-basis-point interest-rate cut on Jan. 22, which sparked fears that rising inflation would erode the value of bonds.

“While mortgage rates are not directly impacted by Federal Reserve interest-rate cuts, to many traders the bond market appeared overbought and the stock market oversold in the wake of an emergency three-quarter-point rate cut last week,” Bankrate.com reported. “Despite another interest-rate cut this week, mortgage rates moved higher, dispelling a common misconception that mortgage rates take their cues from the Fed. Instead it is the outlook for the economy and inflation that are the real drivers of fixed mortgage rates.”

Refinancing and locking in a permanently affordable monthly payment is an attractive option for many homeowners facing the uncertainty of adjustable mortgage resets, Bankrate.com noted. In its survey, Bankrate.com found that qualifying borrowers who refinanced a $200,000 mortgage at today’s 5.88 percent (30-year fixed) would save approximately $108 each month compared to the average 30-year fixed rate of 6.71 percent six months ago.

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