Weak Market and Fear of Inflation Among Reasons for Spike in Mortgage Rates Last Week
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey’ in which the 30-year fixed-rate mortgage (FRM) averaged 6.63 percent with an average 0.6 point for the week ending July 24, 2008, up from last week when it averaged 6.26 percent. Last year at this time, the 30-year FRM averaged 6.69 percent.Get Your Free Summer SALES Kit NOW!
The 15-year FRM this week averaged 6.18 percent with an average 0.6 point, up from last week when it averaged 5.78 percent. A year ago at this time, the 15-year FRM averaged 6.37 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.16 percent this week, with an average 0.7 point, up from last week when it averaged 5.80 percent. A year ago, the 5-year ARM averaged 6.30 percent.
One-year Treasury-indexed ARMs averaged 5.49 percent this week with an average 0.5 point, up from last week when it averaged 5.10 percent. At this time last year, the 1-year ARM averaged 5.69 percent.
‘Market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve (Fed) will raise short-term rates this year all combined to push mortgage rates higher this week,’ said Frank Nothaft, Freddie Mac vice president and chief economist. ‘Some of the key drivers to these concerns were consumer prices jumping 1.1 percent (annualized) in June — the largest increase since September 2005 on a year-over-year basis — coupled with consumer prices growing at a 5.0 percent clip (on a year-over-year basis), the strongest since February 1991.’
‘Additionally, home prices fell 4.8 percent between May 2007 and 2008, according to the Office of Federal Housing Enterprise Oversight’s monthly house price index. And new construction of one-unit homes fell to 604,000 units (annualized) in June, the slowest pace since January 1991.’
Written for www.RealtyTimescom. Copyright