Long-term mortgage rates rose sharply this week, Freddie Mac reported today, as inflation ran high and investors eyed mortgage-back securities in light of higher loan limits.

The average rate on 30-year fixed-rate mortgages shot up by 32 basis points in the last week, rising from 5.72 percent to 6.04 percent, and the average 15-year fixed mortgage was up 39 basis points, from 5.25 percent to 5.64 percent.

Points, or fees that lenders charge for loan processing expressed as a percent of the loan, averaged 0.6 and 0.5, respectively, on the 30- and 15-year loans.

“After trending up in the past two weeks, long-term fixed mortgage rates are back up to nearly where they were at the beginning of the year,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. “In contrast, average rates on adjustable-rate mortgages (ARMs) are about 0.5 percentage points below levels of the first week of this year. As the spread between long-term fixed-rates and adjustable-rates widens, it’s possible we could see a slight increase in the popularity of adjustable-rate mortgages.”

Freddie Mac reported that the five-year Treasury-indexed hybrid ARM gained to an average 5.37 percent from last week’s 5.19 percent, while the average one-year ARM dipped from 5 percent to 4.98 percent. Points on the 5- and one-year loans averaged 0.5 and 0.6, respectively.

According to Bankrate.com, which also conducts a weekly mortgage survey, “Inflation continues to percolate, as evidenced by $100-per-barrel oil and yet another troubling uptick in the Consumer Price Index. But mortgage rates have increased much more than Treasury yields as investors reassess mortgage-backed securities in light of higher conforming loan limits to be announced in March.”

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