Bond Yields Push Mortgage Rates Up
After remaining fairly stable last week, mortgage rates turned upward in the week ending March 5, according to Freddie Mac's (FRE) Primary Mortgage Market Survey released Thursday. 30-year fixed-rate mortgages averaged 5.15 percent with an average 0.7 point, up from last week's average of 5.07 percent. Last year at this time, the 30-year fixed-rate mortgage average sat at 6.03 percent. “Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008,” said Frank Nothaft, Freddie Mac vice president and chief economist. 15-year fixed-rate mortgages averaged 4.72 percent with an average 0.7 point this week, a jump from last week's average of 4.68 percent, but significantly below the year-ago reading of 5.47 percent. Five-year Treasury-indexed ARMs also climbed, from 5.06 percent last week to 5.08 percent this week, according to Freddie Mac. One-year Treasury ARMs were no exception, rising from 4.81 percent last week to 4.86 percent -- not terribly far off the year-ago reading of 4.94 percent. Despite the slight increase this week, rates still remain at historic lows. But as Nothaft said last week, low rates have yet to spur housing demand. “The housing market continues to slow..." Nothaft said. "New home sales fell 10.2 percent in January to the slowest pace since records began...More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization." Bankrate's Holden Lewis said mortgage brokers and lenders say their clients keep holding out for even lower rates. But considering mortgage rates have hovered around 5.5 percent, give or take a quarter of a percentage point, "it doesn't take Sherlock Holmes to deduce that the feds have mortgage rates right where they want them," Lewis said. Bankrate.com's survey -- separate but simlar to Freddie Mac's -- actually reported that mortgage rates were virtually unchanged this week. The benchmark 30-year fixed-rate, according to Bankrate, was unchanged at 5.41 percent, while the Benchmark 15-year fixed-rate rose a mere 1 basis to 4.94 percent. Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.