After dipping last week, long-term mortgage rates climbed in the week ending May 28, following long-term bond yields higher as financial markets tried to discern the state of the economy, said Freddie Mac (FRE)
Thirty-year fixed-rate mortgages averaged 4.91% with an average 0.7 point, up from last week's 4.82% average, but well below the 6.08% average recorded last year at this time, according to Freddie Mac's Primary Mortgage Market Survey.
The 15-year fixed-rate mortgage rose from 4.50% last week to 4.53% this week. A year ago at this time, the 15-year FRM averaged 5.66%.
One-year Treasury-indexed ARMs took a tumble, slipping from 4.82% to 4.69%, marking the lowest one-year ARM average since September of 2005, while Five-year Treasury-indexed adjustable rate mortgages increased, averaging 4.82%, compared to last week's average of 4.79%.
Bankrate.com, who conducts a separate rates survey, also found mortgage rates jumped -- but more drastically. The benchmark 30-year fixed-rate mortgage rose 21 basis points to 5.45%, while the 15-year fixed-rate mortgage rose 12 basis points to 4.86%, according to Bankrate's results
Nothaft says despite rising consumer confidence and predictions the recession is likely to end in the second half of this year, housing continues to be a "drag" on the economy.
"Although single-family existing home sales rose in April, inventories of homes for sale also rose to 9.6 months from 9.0 in March, according to the National Association of Realtors," Nothaft explains. "Moreover, NAR noted that sales of distressed homes made up 45% of the purchases in April. Such types of sales mixed with a large supply of unsold homes keep depressing home prices."
Write to Kelly Curran
Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.