Fear of Inflation Causes Mortgage Rates to Bump up This Week McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market SurveySM (PMMSSM) in which the 30-year fixed-rate mortgage (FRM) averaged 6.67 percent, with an average 0.4 point, for the week ending June 1, 2006, up from last week's average of 6.62 percent. Last year at this time, the 30-year FRM averaged 5.62 percent. The 30-year FRM has not been higher since the week ending June 13, 2002, when it averaged 6.71 percent. The average for the 15-year FRM this week is 6.26 percent, with an average 0.4 point, up from last week's average of 6.23 percent. A year ago, the 15-year FRM averaged 5.20 percent. The 15-year FRM has not been higher since the week ending May 24, 2002, when it averaged 6.28 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.26 percent this week, with an average 0.5 point, down from last week when it averaged 6.21 percent. A year ago, the five-year ARM averaged 5.10 percent. One-year Treasury-indexed ARMs averaged 5.68 percent this week, with an average 0.7 point, up from last week when it averaged 5.61 percent. At this time last year, the one-year ARM averaged 4.26 percent. The 1-year ARM has not been higher since the week ending August 17, 2001, when it averaged 5.71 percent. "The Fed released the minutes of its most recent FOMC meeting, which showed that some members were concerned about inflationary pressure. This caused the bond market yields to rise, and brought about market speculation that the Fed may hike rates sooner than had been expected," said Frank Nothaft, Freddie Mac vice president and chief economist. "All this combined to nudge rates up again this week." "Higher mortgage rates will coincide with a cooling housing market. Although our forecast is for slightly higher rates, the rise will be gradual and orderly over the year." |
