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Rate Update
Jun
5, 11:52 AM EDT
Rates on 30-year mortgages rise to three-month high
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP)
-- Rates on 30-year mortgages edged up this week to the highest
level since March as investors worried about inflation threats.
The mortgage
company Freddie Mac reported Thursday that 30-year fixed-rate
mortgages averaged 6.09 percent, compared with 6.08 percent last
week. It was the highest mark for 30-year mortgages in 12 weeks
since averaging 6.13 percent the week of March 16.
Analysts cited
concerns in financial markets about what the Federal Reserve might
do to confront increased inflationary pressures.
Federal Reserve
Chairman Ben Bernanke expressed new concerns this week about
inflation. The markets interpreted his comments as a signal the
central bank will not cut interest rates further because of fears
that inflation could spiral out of control.
The Fed cut
rates seven times from September through April in an aggressive
campaign to keep the economy from sliding into a deep recession. Now
financial markets are beginning to consider the possibility that
the Fed's next move will be to start raising rates, possibly by
year's end.
The latest
survey also showed that other types of mortgages declined.
Rates on 15-year
fixed-rate mortgages were at 5.65 percent,
compared with 5.66 percent last week.
The five-year
adjustable-rate mortgage dipped to 5.51 percent from 5.62
percent last week. The rate on a one-year adjustable-rate
mortgage stood at 5.06 percent, compared with 5.22 percent last
week.
Slumping house
prices are keeping potential buyers on the fence. Rising mortgage
defaults are dumping more homes on a glutted market. In
addition, many banks have raised their lending standards in
response to a surge in mortgage defaults.
The mortgage
rates do not include add-on fees known as points. The nationwide fee
for 30-year and 15-year fixed-rate mortgages averaged 0.6 point; the
fee on five-year mortgages averaged 0.5 point. One-year
adjustable-rate mortgages averaged 0.7 point.
A year ago,
rates on 30-year mortgages stood at 6.53 percent, 15-year mortgage
rates averaged 6.22 percent, five-year adjustable-rate mortgages
were at 6.24 percent and one-year adjustable-rate mortgages were at
5.65 percent.
Source: ap.org---
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