Mortgage rates took off during the week ended October 16 according to results of Freddie Mac's Primary Mortgage Market Survey released Thursday morning.

In most cases the rates reached levels not seen since last summer.

The 30-year fixed-rate mortgage (FRM) averaged 6.46 percent with 0.6 point for the week.  During the previous week the average was 5.94 percent with 0.6 point.   This 52 basis point jump was the largest weekly increase since the week ended April 17, 1987 when the 30-year shot up 84 basis points.

The last time the rate for the 30-year FRM was as high as 6.46 percent was during the week ended August 21 when the average rate was 6.47. 

The increase in the 15-year FRM was almost as precipitous, jumping 51 basis points in one week to an average of 6.14 percent.  Fees and points were unchanged at 0.6.  The previous high for the 15-year was reached during the week ended July 24 when the rate was 6.18 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.14 percent this week, with an average 0.6 point, up from last week when it averaged 5.90 percent, also with 0.6 point.  The hybrid was last at this level also during the week ended July 24 when it averaged 6.16 percent.

The one-year Treasury-indexed ARM was considerably less volatile than the longer term products.  The average contract interest rate was 5.16 percent this week with an average 0.6 point, up from last week when it averaged 5.15 percent with 0.6 point.   

"Interest rates for 30-year fixed-rate mortgages rose this week to an 8-week high," said Frank Nothaft, Freddie Mac vice president and chief economist.  "ARM rates, which tend to be based on shorter-term benchmarks, showed smaller gains in part due to the Federal Reserve's October 8 inter-meeting rate cut in the overnight lending rate.

"Recent economic reports suggest the economy is still slowing.  For instance, retail sales fell for the third consecutive month by 1.2 percent in September.  In addition, in its latest Beige Book, released October 15th, the Federal Reserve indicated that economic activity weakened in September across all twelve Federal Reserve Districts and that several Districts also noted that their contacts had become more pessimistic about the economic outlook."