Market panic over a burgeoning economic crisis last week helped push mortgage rates to their largest weekly gain in over two decades last week, according to data released Thursday morning by Freddie Mac (FRE). A 30-year fixed-rate mortgage averaged 6.46 percent with an average 0.6 point for the week ending Oct. 16, up a whopping 52 basis points from last week when it averaged 5.94 percent. Last year at this time, the 30-year FRM averaged 6.40 percent, Freddie Mac said. This week’s increase was the largest weekly increase since the week ending April 17, 1987, when the 30-year FRM rose 84 basis points. Bankrate also reported on the jump in interest rates in its own survey, which found average rates on a 30-year mortgage at 6.74 percent, a jump of 54 basis points from the previous week. Rates are higher, and sharply so, but let’s be clear here: even a seven percent mortgage, were we to start seeing it as the average, isn’t exactly a historically high mortgage rate. Rates are jumping in response to financial crisis, but we’re not staring at 15 percent mortgages any time soon. (Besides, the real villian in mortgage originations these days isn’t rates, it’s underwriting criteria.) Keith Gumbinger of HSH Associates, who releases their own rate study on Friday evenings, told CNNMoney’s Les Christie that the federal bailout was to blame for the jump in rates — insofar as the Treasury will need to sell a chunk of new debt to fund all of it. “Who even has the cash to buy them all?” he told CNNMoney. “The Treasury has to offer higher interest rates to sell.” “Interest rates for 30-year fixed-rate mortgages rose this week to an 8-week high,” said Frank Nothaft, Freddie Mac vice president and chief economist. “ARM rates, which tend to be based on shorter-term benchmarks, showed smaller gains in part due to the Federal Reserve’s October 8 inter-meeting rate cut in the overnight lending rate. “Recent economic reports suggest the economy is still slowing. For instance, retail sales fell for the third consecutive month by 1.2 percent in September. In addition, in its latest Beige Book, released October 15th, the Federal Reserve indicated that economic activity weakened in September across all twelve Federal Reserve Districts and that several Districts also noted that their contacts had become more pessimistic about the economic outlook.” The Treasury moved to place the GSEs into conservatorship under the rationale of making mortgages more available; it’s pretty clear that on the rate front, mortgages aren’t much better off than they were when both companies were independent of government control. And underwriting standards — the other piece of the origination puzzle — are continually tightening further, as well. For more information, visit http://www.freddiemac.com.