Freddie Mac: mortgage interest rates rose again last week
Mortgage interest rates continue to climb, as worries about inflation permeate the market, according to Freddie Mac. The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed mortgage rose to 4.83% for the week ending Thursday from 4.61% a week earlier. The rate is now at the highest level since May. The average rate for a 15-year, fixed mortgage increased to 4.17% from 3.96% the prior week, according to the Freddie Mac survey. "Market concerns over stronger economic growth that, in the near term, could lead to an increase in inflation have sparked a rise in bond yields and mortgage rates have followed," according to Freddie Mac chief economist Frank Nothaft. Earlier this month, Nothaft said he expects rates on a 30-year, fixed mortgage to remain below 5% throughout 2011, as the economic recovery accelerates. "For instance, the growth in retail sales excluding automobiles in November was twice that of the market consensus forecast. Industrial production showed the biggest gain in November since July, according to the Federal Reserve Board. And consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, rose to a six-month high in December," he said. Rates are still considerably lower than the year ago, when the 30-year averaged 4.94% and the average 15-year, fixed mortgage was 4.38%. Interest rates for the traditional 30-year mortgage dipped to as low as 4.07% recently, according to real estate research firm Zillow. Freddie Mac reported 30-year, fixed rates hit 4.17% in early November. Freddie Mac said the average five-year, adjustable-rate mortgage increased to 3.77% this week from 3.60% a week earlier but is down from 4.37% a year ago. The average rate for a one-year, ARM rose to 3.35% from 3.27% a week ago. The rate is down from 4.34% at this time last year. Write to Jason Philyaw.