Tweet
stabilising [img]/forums/images/graemlins/70402-thinking.gif[/img]
Mortgage rates up for a third week
Freddie Mac economist sees rising rates normalizing housing market
Last Update: 12:04 PM ET Jun 29, 2006
CHICAGO (MarketWatch) -- Mortgage rates rose for the third week in a row, sending the 30-year loan to its highest average rate in 49 months, according to Freddie Mac's weekly survey released Thursday.
The higher rates, which have moved up more than half a percentage point since the start of the year, are definitely cooling off the housing market, returning it to more normal levels, according to Freddie Mac's (FRE :
.
"With higher interest rates, the housing market has begun a gradual and orderly reversion towards historical norms," Nothaft said. "For instance, new construction, home sales and house price appreciation have all been slowing over the past few months."
Mortgage applications have also tailed off considerably, the Mortgage Bankers Association said this week, falling to a four-year low as rates have risen to four-year highs. Read more on the application decline.
"Financial markets continue to expect more rate hikes by the Fed over the next six months, which has added upward pressure on mortgage rates," Nothaft said in a news release.
For the week ending Thursday, the 30-year fixed-rate mortgage averaged 6.78% nationally, up from last week's 6.71% average. The rate averaged 5.62% at the same time last year, and has not been higher since May 24, 2002, when it averaged 6.81%.
The 15-year fixed-rate averaged 6.43% for the week, up from 6.36%. The rate averaged 5.20% a year ago, and has not been higher since April 12, 2002, when it averaged 6.49%.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.39%, up from 6.32% last week and 5.19% a year ago. The rate is at its highest level since Freddie Mac started tracking it on Jan. 6, 2005.
The 1-year Treasury-indexed ARM averaged 5.82% this week, up from 5.75% last week. The rate averaged 4.33% a year ago, and has not been higher since the week of June 8, 2001, when it averaged 5.85%.
The 30-year and 15-year fixed-rates as well as the 5-year hybrid ARM required payment of an average 0.5 point to obtain the interest rate. The 1-year ARM required an average 0.8 point. A point is 1% of the loan amount, charged as prepaid interest.
The Mortgage Bankers' separate interest-rate survey released Wednesday also showed mortgages jumping.
The survey found the average contract interest rate for 30-year fixed-rate mortgages increased to 6.86% from 6.73% over the week, 15-year fixed-rate mortgages increased to 6.49% from 6.37% and one-year ARMs increased to 6.36% from 6.22%. The MBA survey covers about half the U.S. mortgage market.
Mortgage rates up for a third week
Freddie Mac economist sees rising rates normalizing housing market
Last Update: 12:04 PM ET Jun 29, 2006
CHICAGO (MarketWatch) -- Mortgage rates rose for the third week in a row, sending the 30-year loan to its highest average rate in 49 months, according to Freddie Mac's weekly survey released Thursday.
The higher rates, which have moved up more than half a percentage point since the start of the year, are definitely cooling off the housing market, returning it to more normal levels, according to Freddie Mac's (FRE :
.
"With higher interest rates, the housing market has begun a gradual and orderly reversion towards historical norms," Nothaft said. "For instance, new construction, home sales and house price appreciation have all been slowing over the past few months."
Mortgage applications have also tailed off considerably, the Mortgage Bankers Association said this week, falling to a four-year low as rates have risen to four-year highs. Read more on the application decline.
"Financial markets continue to expect more rate hikes by the Fed over the next six months, which has added upward pressure on mortgage rates," Nothaft said in a news release.
For the week ending Thursday, the 30-year fixed-rate mortgage averaged 6.78% nationally, up from last week's 6.71% average. The rate averaged 5.62% at the same time last year, and has not been higher since May 24, 2002, when it averaged 6.81%.
The 15-year fixed-rate averaged 6.43% for the week, up from 6.36%. The rate averaged 5.20% a year ago, and has not been higher since April 12, 2002, when it averaged 6.49%.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.39%, up from 6.32% last week and 5.19% a year ago. The rate is at its highest level since Freddie Mac started tracking it on Jan. 6, 2005.
The 1-year Treasury-indexed ARM averaged 5.82% this week, up from 5.75% last week. The rate averaged 4.33% a year ago, and has not been higher since the week of June 8, 2001, when it averaged 5.85%.
The 30-year and 15-year fixed-rates as well as the 5-year hybrid ARM required payment of an average 0.5 point to obtain the interest rate. The 1-year ARM required an average 0.8 point. A point is 1% of the loan amount, charged as prepaid interest.
The Mortgage Bankers' separate interest-rate survey released Wednesday also showed mortgages jumping.
The survey found the average contract interest rate for 30-year fixed-rate mortgages increased to 6.86% from 6.73% over the week, 15-year fixed-rate mortgages increased to 6.49% from 6.37% and one-year ARMs increased to 6.36% from 6.22%. The MBA survey covers about half the U.S. mortgage market.
Comment