Mortgage Rates Continue to Climb, Reach 3-Month High
Mortgage rates have now increased in 7 of the last 8 weeks, with the average 30-year fixed mortgage rate rising to 6.42 percent, according to data released today by Bankrate.com. Current mortgage rates are at the highest level since October 25 of last year. 30-year fixed rate mortgages had an average of 0.34 discount and origination points, Bankrate reported. The average 15-year fixed rate mortgage popular for refinancing climbed to 6.19 percent. On larger loans, the average jumbo 30-year fixed rate increased to 6.63 percent, while adjustable mortgage rates were also on the move, with the average 5/1 ARM stepping higher to 6.3 percent and the average one-year ARM reaching 6.06 percent, the highest since July. Mortgage rates have been pressured in recent weeks by evidence of a stronger-than-expected economic environment. Even in the absence of much economic data over the past week, bond yields moved higher following lackluster reception to a government debt auction. Bond prices and yields move inversely and mortgage rates are closely related to yields on long-term government bonds. One positive development for mortgage rates is the Federal Open Market Committee's admission that "core inflation readings have improved modestly in recent months," as lower inflation can remove much of the upward pressure being felt by mortgage rates. Fixed mortgage rates are still one-half percentage point lower since the recent peak last June. At the time, the average 30-year fixed mortgage rate was 6.93 percent. At the time, the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.42 percent, the same loan originated today would carry a monthly payment of $1,034.25.