Rates on "plain vanilla" 30-year fixed-rate mortgages shot back above 5 percent this week to a 25-week high, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.
A surge in stock prices and burgeoning government debt is making mortgage-backed securities and long-term Treasuries look less attractive to investors, pushing up their yields.
The 30-year fixed-rate mortgage (FRM) averaged 5.29 percent with an average 0.7 point for the week ending June 4, up from 4.91 percent last week but well below the 6.09 percent average a year ago, Freddie Mac said.
The 15-year FRM this week averaged 4.79 percent with an average 0.7 point, up from 4.53 percent last week but down from 5.65 percent a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.85 percent this week, with an average 0.6 point, up from 4.82 percent last week but down from 5.51 percent a year ago.
One-year Treasury-indexed ARMs averaged 4.81 percent this week with an average 0.6 point, up from 4.69 percent last week bu down from 5.06 percent a year ago.
Those rates are for borrowers with good credit making 20 percent down payments. Borrowers making smaller down payments or taking out loans too large or risky for purchase by Freddie Mac and Fannie Mae generally pay more.
The Mortgage Bankers Association reports that applications for mortgage refinancings fell 24 percent last week, but demand for purchase loans increased 4.3 percent (see story).
Pending home sales rose 6.7 percent in April as falling prices and low interest rates helped make homes more affordable, National Association of Realtors Chief Economist Lawrence Yun said (see story).
***
What’s your opinion? Leave your comments below or send a letter to the editor.
