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Mortgage Rates Climb Higher

Mortgage interest rates across the board spiked this week, following long-term bond yields higher as the focus among investors shifted to the budget deficit and the possibility of inflation. According to ""Freddie Mac"":http://www.freddiemac.com, the commitment rate for a 30-year fixed rate mortgage is now at its highest level since December 11, 2008, 25 weeks ago.
Freddie Mac released the results of its ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/release.html (PMMS) on Thursday. For the week ending June 4, 2009, 30-year fixed-rate mortgages (FRMs) averaged 5.29 percent (0.7 point), a significant jump from last week when they averaged 4.91 percent. Last year at this time, though, the 30-year FRM averaged 6.09 percent.
The 15-year FRM in Freddie Mac's study averaged 4.79 percent (0.7 point) this week. Last week it came in at 4.53 percent, and a year ago it was 5.65 percent.
Freddie Mac reported that interest rates for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.85 percent this week (0.6 point), up slightly from last week when they were 4.82 percent. A year ago, the 5-year ARM averaged 5.51 percent.
Based on Freddie Mac's market survey, 1-year Treasury-indexed ARMs averaged 4.81 percent this week (0.6 point). Last week they were 4.69 percent, and at this time last year, the 1-year ARM averaged 5.06 percent.
Despite the increase in numbers this week, ""Bankrate"":http://www.bankrate.com, which issues a similar weekly mortgage rate report, notes that commitment rates for home loans still remain well below the six percent mark, and are not an impediment to well-qualified borrowers. Bankrate also says the Federal Reserve, with more than $1 trillion remaining in their mortgage- and government-bond buyback program, could accelerate those purchases to bring rates back down.
According to ""Bankrate's weekly mortgage survey"":http://www.bankrate.com/mortgagerates, based on data provided by the top 10 banks and thrifts in the nation's top 10 markets, the average rate for 30-year FRMs rose to 5.65 percent this week. The average 15-year FRM among the largest institutions climbed to 5.06 percent, while the average jumbo 30-year fixed rate rebounded to 6.68 percent. Bankrate reported the 5-year ARM jumped to 5.20 percent, while the 1-year ARM averaged 5.01 percent this week.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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