Mortgage Rates Rise On Inflation Fears
Fixed mortgage rates moved higher following the Fed's stated concerns about inflation in the past week. The average 30-year fixed mortgage rate rose to 6.22 percent with an average of 0.28 discount and origination points, according to Bankrate.com's weekly national survey of large lenders. The average 15-year fixed rate mortgage, popular for refinancing, inched lower to 5.92 percent, while on larger loans, the average jumbo 30-year fixed rate increased to 6.5 percent. Adjustable rate mortgages were lower, with the average 5/1 ARM dropping to 6.05 percent and the average one-year ARM sliding to 5.94 percent. Fixed mortgage rates remain extraordinarily low even as many adjustable rate and other more exotic mortgages reset to higher levels. With inflation remaining above the Fed's comfort zone, fixed mortgage rates increased this week. Fixed mortgage rates are closely related to yields on long-term government bonds, but rates on adjustable mortgages dipped as consensus builds that the Fed could eventually cut interest rates. Rates for adjustable mortgage products are pegged to yields on shorter-term Treasury securities. Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates. At the time, the average 30-year fixed mortgage rate peaked at 6.93 percent, and a $165,000 loan carried a monthly payment of $1,090.00. With the average 30-year fixed rate now 6.22 percent, the same loan originated today would carry a monthly payment of $1,012.72. For more information, visit http://www.bankrate.com.