Mortgage rates jumped during the week, surging to levels not seen in about a year as a result of inflationary concerns and continued weakness in the housing market, according to mortgage financier Freddie Mac.
The traditional 30-year fixed-rate mortgage shot up to 6.63 percent this week from 6.26 percent a week earlier, while the 15-year climbed 30 basis points to 6.18 percent.
Adjustable-rate mortgages faired even worse, with the average five-year ARM jumping to 6.16 percent from 5.80 percent, while the one-year ARM surged 39 basis points to 5.49 percent.
“Market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve (Fed) will raise short-term rates this year all combined to push mortgage rates higher this week,” said Frank Nothaft, Freddie Mac chief economist.
“Additionally, home prices fell 4.8 percent between May 2007 and 2008, according to the Office of Federal Housing Enterprise Oversight’s monthly house price index. And new construction of one-unit homes fell to 604,000 units (annualized) in June, the slowest pace since January 1991.”
A year ago, the 30-year averaged 6.69 percent, the 15-year fixed 6.37 percent, the five-year ARM 6.30 percent, and the one-year ARM 5.69 percent.
Freddie Mac has conducted its weekly survey since the 1970s, with data based on conforming mortgages with a loan-to-value of 80 percent.
Related Topics:
