Mortgage rates at 5-month high
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By Martin Crutsinger
Associated Press
WASHINGTON — Rates on 30-year mortgages jumped this week to the highest level in five months, reflecting financial market anxieties about inflation.
Mortgage giant Freddie Mac reported yesterday that the nationwide average for 30-year, fixed-rate mortgages rose this week to 5.91 percent, up from 5.80 percent last week. It was the third consecutive weekly increase and pushed the 30-year rate to its highest level since mid-April, when it was also 5.91 percent.
The increase followed the Federal Reserve's decision last week to boost a key short-term interest rate for an 11th time as central bank policymakers focused more on the inflationary threats of rising oil prices than risks to economic growth from hurricanes Katrina and Rita.
Frank Nothaft, chief economist for Freddie Mac, said worries about inflation and a variety of other economic threats have also influenced financial markets, where long-term rates are set.
"This past week's increase in mortgage rates reflects market anxieties over inflationary pressures, energy price increases and slipping consumer confidence," Nothaft said. "Taken together these developments suggest less personal spending during the later quarter of the year and additional upward pressure on mortgage rates."
He said he expects only a slight further increase in mortgage rates for the rest of the year.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing home mortgages, averaged 5.48 percent this week, up from 5.37 percent last week.
One-year adjustable rate mortgages rose to 4.68 percent, the highest level in more than three years, up from 4.48 percent last week.
Rates on five-year hybrid adjustable rate mortgages averaged 5.44 percent this week, up from 5.31 percent last week.
The nationwide averages for mortgage rates do not include add-on fees known as points. The one-year ARM carried a fee of 0.6 point while all other mortgage categories in the survey had an average nationwide fee of 0.5 point.
A year ago, 30-year mortgages averaged 5.72 percent, 15-year mortgages were at 5.12 percent and one-year ARMs averaged 3.97 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.