Mortgage rates continued their upward climb this week, as growing concern over inflation overshadowed concerns of a slowing economy. Freddie Mac (FRE)
said Thursday morning that its weekly Primary Mortgage Market Survey found rates on a 30-year fixed-rate mortgage (FRM) averaged 6.42 percent, with an average 0.7 point, for the week ending June 19.
That's a jump of 10 basis points over the past week, but still below the 6.69 percent recorded at this time last year, Freddie Mac said. The last time the 30-year FRM was this high was the week ending September 27, 2007, when it averaged 6.42 percent.
"Fixed-rate mortgage rates continued to climb this week to the highest point in nearly nine months following the release of May’s consumer and producer price indexes, both of which showed stronger levels of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Additionally, consumer prices rose 0.6 percent last month, the most since November 2007, and traders began to fully price in a Federal Reserve rate hike by the end of September, based on the federal funds futures market.
"Meanwhile, the housing market still struggles. New construction of single family homes fell in May to the weakest pace since January 1991 and April’s starts had a downward revision."
Traditional 30-year fixed rate mortgages weren't the only product seeing rates increase, as a result.
Freddie Mac said that the 15-year FRM this week averaged 6.02 percent with an average 0.7 point, up from last week when it averaged 5.93 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.89 percent this week, up a sharp 19 basis points from last week -- the highest the 5-year ARM has been since the week ending December 27, 2007, when it averaged 5.90 percent.
For more information, visit http://www.freddiemac.com
Disclosure: The author held no positions in FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.