Long- And Short-term Mortgage Rates Take Back Last Week's Drop
July 21, 2006
Mortgage Rates This Week Reflect Market Apprehension Of More Rate Hikes By The Fed
McLean, VA – According to Freddie Mac Primary Mortgage Market SurveySM (PMMSSM) the 30-year fixed-rate mortgage (FRM) averaged 6.80 percent, with an average 0.5 point, for the week ending July 20, 2006, up from last week's average of 6.74 percent. Last year at this time, the 30-year FRM averaged 5.73 percent. The last time the 30-year FRM was higher was the week ending May 24, 2002, when it averaged 6.81 percent.
The average for the 15-year FRM this week is 6.41 percent, with an average 0.4 point, up from last week's average of 6.37 percent. A year ago, the 15-year FRM averaged 5.32 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.36 percent this week, with an average 0.6 point, up from last week when it averaged 6.33 percent. A year ago, the five-year ARM averaged 5.26 percent.
One-year Treasury-indexed ARMs averaged 5.80 percent this week, with an average 0.7 point, up from last week when it averaged 5.75 percent. At this time last year, the one-year ARM averaged 4.42 percent.
"Financial markets were a bit jittery after core Consumer Price Index (CPI) figures for June were released that indicated inflation might still be a potential threat," said Frank Nothaft, Freddie Mac vice president and chief economist. "If this were the case, the Fed would be more inclined to continue to raise rates this year. Mortgage rates reflected that thinking and rose accordingly."
"However, Fed Chief Bernanke, in his semi-annual speech to Congress, hinted that another rise in overnight lending rates might not be imminent and financial markets breathed a collective sigh of relief, which should be reflected in the results of next week's survey."
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Source: Freddie Mac