Mortgage interest rates have been seesawing like the stock market over the last few weeks and this week they again took some mega-jumps.
According to Freddie Mac's Primary Mortgage Market Survey for the week ended October 30, the 30-year fixed-rate mortgage (FRM) increased from 6.04 percent with 0.6 point during the previous week to an average of 6.46 percent with 0.7 point. This was a healthy jump but fell far short of the increase during the week ended October 16 when the 30-year jumped 52 basis points, a one-week spurt not seen for 21 years.
The 15-year FRM made a more pronounced move; it averaged 6.19 percent with 0.7 point, an increase of 47 basis points over the 5.72 percent rate a week earlier. Fees and points that week averaged 0.6.
Even shorter term adjustable mortgages which had been fairly stable of late made some big moves. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) carried an average contract interest rate of 6.36 percent and 0.7 point this week compared to the previous week when the averages were 6.06 percent and 0.6 point.
One-year Treasury-indexed ARMs averaged 5.38 percent this week with an average 0.6 point, up from last week when it averaged 5.23 percent with 0.5 point. Frank Nothaft
, Freddie Mac vice president and chief economist said in a press release, "Long-term mortgage rates followed long-term Treasury bond yields higher this week, pushing fixed-rate mortgages up to levels of two weeks ago. "The Federal Reserve's 0.50 percentage point cut in the discount rate and federal funds target rate on Wednesday was widely anticipated in the financial markets and is likely to keep short-term interest rates low; consequently, initial interest rates on ARMs, which tend to be set relative to other short-term rates, may remain near current levels.
"In other news, house-price declines in many markets have improved housing affordability and stimulated home sales. In September, sales of existing homes rose 5.5 percent while sales of new homes were up 2.7 percent, at a seasonally-adjusted annual rate," Nothaft said.