Interest rates as reported by Freddie Mac and those published by the Mortgage Bankers Association (MBA) diverged sharply for the week ending June 14 (Freddie Mac) and June 15 (MBA).

Freddie Mac's Primary Mortgage Market Survey concluded there was a double digit jump in the rates of each of the four products the survey tracks, taking each to levels last seen nearly one year ago.

The 30-year fixed-rate mortgage (FRM) had an average contract interest rate of 6.74 percent, an increase of 21 basis points from the previous week. Points remained at 0.4. This is the highest the 30-year FRM has been since July 20, 2006 when it averaged 6.80 percent.



The 15-year FRM averaged 6.43 percent with 0.4 point compared to the previous week when it averaged 6.22 percent with 0.4 point. The last time the 15-year rate was higher was also July 20 when it averaged 6.44 percent.

Adjustable rate mortgages (ARMs) were up a little less dramatically than the fixed-rate products. The five-year Treasury-indexed hybrid ARM averaged 6.37 percent, an increase of 13 basis points from the week ended June 7. Fees decreased from 0.6 to 0.5. This is the highest rate for the 5/1 since July 6 when it averaged 6.39 percent.

The one-year Treasury-indexed ARM averaged 5.75 percent compared to the previous week when it averaged 5.65 percent. Fees were unchanged at 0.7 point. During the week ended July 27, the rate averaged 5.78 percent.

"Mortgage rates moved sharply upward this week, with rates on 30-year fixed-rate mortgages jumping more than 20 basis points, the largest upward movement in over three years," said Frank Nothaft, Freddie Mac vice president and chief economist. "These moves parallel rising yields on Treasury securities, as concerns about inflation pressures and continuing strength of consumer and business spending have dimmed hopes for an interest rate cut."

"Higher mortgage rates may weigh on the housing market's gradual recovery. While demand appears to have stabilized, inventories of new homes remain high, putting downward pressure on construction and home prices."

However the MBA Weekly Mortgage Applications Survey had a quite different outcome from the Freddie Mac survey. In the MBA report the 30-year FRM actually decreased albeit by a mere single basis point to 6.60 percent with points, including the origination fee, increasing from 1.44 to 1.58.

The average contract interest rate for 15-year FRMs was unchanged at 6.28 percent with points increasing from 1.39 to 1.42.

The biggest change was in the one-year ARM which more closely mirrored the Freddie Mac data, rising from 5.48 percent to 5.70 percent with points decreasing from 1.18 to 1.16.

Mortgage application activity was down 3.4 percent on a seasonally adjusted basis and 4.1 percent unadjusted from the previous week and was up 13.2 percent from the same week in 2006.

Refinancing represented 38 percent of all mortgage activity, the same as the week before, and the ARM market share rose from 18.7 percent to 20.3 percent.