DOW JONES NEWSWIRES
Mortgage rates jumped again this week, to their highest levels
in seven months as bond yields rose, and the average rate on
30-year fixed-rate mortgages moved further above 5%, according to
Freddie Mac's (FRE) weekly survey of mortgage rates.
Mortgage rates had fallen in recent months as providers tried to
entice buyers amid the housing market downturn. But Treasurys have
continued to fall in price amid worries of the flood of supply
being sold by the federal government to finance its ballooning
deficit.
The 30-year fixed-rate mortgage averaged 5.59% for the week
ended Thursday, up from last week's 5.29% but down from 6.32% a
year ago.
Rates on 15-year fixed-rate mortgages were 5.06%, up from 4.79%
last week but down from 5.93% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 5.17%, up from 4.85% last week but well below 5.51% a year
ago. One-year Treasury-indexed ARMs were 5.04%, up from 4.81% last
week but down slightly from 5.09% a year ago.
To obtain the rates, the fixed-rate mortgages and the one-year
ARM required payment of an average 0.7 point and the five-year ARM
required an average 0.6 point. A point is 1% of the mortgage
amount, charged as prepaid interest.
Freddie Mac Vice Preident and Chief Economist Frank Nothaft said
federal-funds futures rose after last week's May employment report
came in better than expected, signaling the market expects the
Federal Reserve may raise its benchmark rate sooner rather than
later.
He added higher rates are slowing refinancing activity but not
demand for home purchases.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com