Mortgage Rates Inch Higher For Week

After having fallen to a seven-month low, 30-year mortgage rates rose last week for the first time in five weeks, according to the Pittsburgh Post-Gazette.

However, rates still remain higher than a year ago, when they bottomed out at historic lows during the peak of the nation’s real estate boom.

In a survey of the nation’s lenders, government-backed home loan giant Freddie Mac reported last Thursday that 30-year, fixed-rate mortgages rose to 6.37 percent, up from 6.30 percent last week. That marks the lowest level since rates finished the first week of March at 6.24 percent.

Analysts attribute the increase in mortgage rates to lingering fears in financial markets about inflation.

“Renewed concern that inflation is still an issue put some upward pressure on bonds, which translates into higher interest and mortgage rates,” said Freddie Mac chief economist Frank Nothaft.

Data compiled by Freddie Mac supports the theory that the adjustable-rate mortgages owned by so many Americans are particularly sensitive to these increased inflation worries. The increase in those rates has considerably narrowed the gap between adjustable and fixed-rate mortgages.

Rates on 15-year, fixed-rate mortgages, a popular choice for home mortgage refinancing, averaged 6.06 percent last week, up from 5.98 percent a week prior. Meanwhile, rates on one-year ARMs jumped to 5.56 percent last week, up from 5.46 percent the previous week.

As for five-year adjustable rate mortgages, those also saw a significant increase, rising to 6.10 percent last week from an even 6 percent.

A year ago, the 30-year fixed-rate mortgage (considered the benchmark loan, and the most common in the industry), averaged 6.03 percent, while 15-year mortgages stood at 6.06 percent, one-year ARMs were at 4.85 percent and the five-year ARMs were at 5.57 percent.