Mortgage Rates Rise To 8 Month High

Today Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.32 percent with an average 0.7 point for the week ending June 12, 2008, up from last week when it averaged 6.09 percent. Last year at this time, the 30-year FRM averaged 6.74 percent. The last time the 30-year FRM was higher was the week ending October 25, 2007, when it averaged 6.33 percent.

The 15-year FRM this week averaged 5.93 percent with an average 0.6 point, up from last week when it averaged 5.65 percent. A year ago at this time, the 15-year FRM averaged 6.43 percent. The last time the 15-year FRM was higher was the week ending October 25, 2007, when it averaged 5.99 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.70 percent this week, with an average 0.7 point, up from last week when it averaged 5.51 percent. A year ago, the 5-year ARM averaged 6.37 percent.

One-year Treasury-indexed ARMs averaged 5.09 percent this week with an average 0.6 point, up from last week when it was 5.06 percent. At this time last year, the 1-year ARM averaged 5.75 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mortgage rates jumped this week after a number of Federal Reserve (Fed) officials, most notably Chairman Bernanke and Vice Chair Kohn, expressed concern over a threat of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought.

"Meanwhile, news reports on the housing market were mixed. Serious delinquencies (loans over due 90-days or more or in foreclosure) for both prime and subprime conventional mortgages nearly doubled between first quarter of 2007 and 2008, according to the Mortgage Bankers Association. However, the household debt service and homeowner financial obligation ratios improved over the same period. Moreover, pending home sales for April unexpectedly rose by 6.3 percent and mortgage applications for both home purchases and refinancing were also up last week."