Interest rates tied to home loans took a turn for the worse after troubling comments from the Fed regarding inflation sent them to their highest levels since last fall, mortgage financier Freddie Mac said today.
“Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman (Ben) Bernanke and Vice Chair (Donald) Kohn, expressed concern over a threat of inflation,” Frank Nothaft, Freddie Mac chief economist, said in a statement.
“This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought,” added Nothaft.
During the week ending June 12, the benchmark 30-year fixed-rate mortgage leapt to 6.32 percent, up from 6.09 percent last week, while the 15-year jumped to 5.93 percent from 5.65 percent.
The five-year adjustable-rate mortgage wasn’t exempt from the upward pressure either, as it averaged 5.70 percent, up from 5.51 percent a week earlier.
The only loan product that saw mild movement for the week was the one-year ARM, which increased a mere three basis points to 5.09 percent.
But despite the fact that rates climbed to levels not seen since last Halloween, they still remain historically low.
A year ago, the 30-year averaged 6.74 percent, the 15-year 6.43 percent, the five-year 6.37 percent, and the one-year 5.75 percent.
The weekly survey has been conducted since 1971, relying upon data from conforming mortgages with an LTV of 80 percent.
(photo: flynnwynn)
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