Fixed rate mortgages continued to creep up during the week ended May 25 while there was a slight easing of adjustable rate products according to the Weekly Primary Mortgage Market Survey released by Freddie Mac.

The average rate for 30-year fixed-rate mortgages ticked upward to 6.62 percent from 6.60 percent for the week ended May 18. This is the highest level for this rate since the week ending June 20, 2002. The 15-year fixed was up three basis points to 6.23 percent. However, fees and points for both products declined from 0.5 to 0.4, the lowest point we could find for this figure in Freddie Mac data going back to 1971 for the 30-year and 1991 for the 15-year.

Freddie Mac figures showed a decline in the rate for the 5/1 hybrid adjustable rate mortgage from 6.23 percent to 6.21 percent although fees and points were up 0.1 to 0.6. The 1-year ARM dropped 1 basis point to 5.61 percent with fees and points unchanged at 0.7.

On a regional basis the 30-year ranged from 6.55 in the Southeast region to 6.68 in the North Central. The range for 15-year fixed mortgages was from a low of 6.17 in the Southeast to 6.30 in the North Central. In the latter region, however, fees and points hit a low of 0.2 for both 15- and 30-year mortgages.

Frank Nothaft, vice president and chief economist for Freddie Mac commented that " rates are roughly a half a percentage point higher than they were at the start of the year, which has led to some moderation in the housing market. Indeed, in the first quarter of 2006, the housing industry directly accounted for only seven percent of real Gross Domestic Product (GDP) compared to 19 percent in the fourth quarter of 2005."

"Total housing starts for April were the weakest since November 2004, and although new home sales in April were the strongest this year, the number of homes for sale hit a record high. Meanwhile, existing home sales declined an expected two percent, further evidence of an easing in the pace of housing."

The Mortgage Bankers Association Weekly Mortgage Application Survey for the week ending May 26 and released on May 31 showed an average interest rate for the 30-year fixed rate mortgage of 6.66 percent. This is an increase of 5 basis points from the previous week with points decreasing to 1.03 from 1.17. Points in this survey include the origination fee and include only 80 percent loan-to-value mortgages.

The 15-year fixed rate mortgage decreased to 6.22 percent from 6.23 with points rising 0.02 to 1.18.

The biggest change was recorded for one-year ARMs. The average interest rate moved from 6.02 percent to 6.09 percent while points decreased from 0.87 to 0.83.

Mortgage activity was down slightly. Applications decreased 1.9 percent on a seasonally adjusted basis from the previous week and 2.6 percent on an unadjusted basis. Activity was down 22.4 percent from the same week in 2005.

Refinancing activity, which had been up last week, retreated and now represents 34.9 percent of all mortgage applications, a -0.8 percent change. The share of new loans that were adjustable rate products increased to 30.7 percent from 30.5 percent the previous week.