RISMEDIA, May 5, 2005—mortgage rates jogged higher in the past week, with the average 30-year fixed rate mortgage rising from 6.64 percent to 6.67 percent, according to Bankrate.com's weekly national survey of large lenders. This is the highest since the week of June 12, 2002. The 30-year fixed rate mortgages in this week's survey had an average of 0.36 discount and origination points.
The average 15-year fixed rate mortgage popular for refinancing stepped up to 6.29 percent. On larger loans, the average jumbo 30-year fixed rate was unchanged at 6.83 percent. Adjustable rate mortgages inched higher as well. The average 5/1 adjustable rate mortgage ticked up to 6.32 percent, and the average one-year ARM nosed higher to 5.89 percent.
Mortgage rates bobbed up and down in the past week, initially declining following Fed Chairman Ben Bernanke's report before the Congressional Joint Economic Committee. Bernanke's mention of a potential pause in interest rate hikes buoyed spirits that the Fed might not raise rates as much as expected. But that likelihood was reconsidered once Bernanke remarked that he had misinterpreted, and was merely mentioning the possibility of a pause. Rates then moved back up, with the ten year Treasury yield rising to 5.15 percent as Bernanke reiterated that further Fed action will be data dependent. Mortgage rates are closely related to yields on long-term government bonds.
Fixed mortgage rates have increased notably compared to one year ago. This time last year, the average 30-year fixed mortgage rate was 5.81 percent, meaning that the monthly payment on a loan of $165,000 was $969.19. Although fixed mortgage rates have been up and down since, the average 30-year fixed rate is now 6.67 percent, meaning the same loan originated now would carry a payment of $1,061.43. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.
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