In this week’s Mortgage Interest rate survey, according to Freddie Mac, rates jumped 10 basis points or 1/100%, as investors sold bonds on the market – the law of supply and demand causes bond prices to go down. When bond prices fall, bond yields rise, and mortgage rates follow the trend.
Freddie Mac released its May 25th, 2007 weekly results of the Primary Mortgage Market Survey (PMMS), with interest rates for the following programs:
* 30-year fixed-rate mortgage (FRM) averaged 6.37 percent with an average 0.4 point for the week ending May 24, 2007, up from last week when it averaged 6.21 percent.
* The 15-year FRM this week averaged 6.06 percent with an average 0.4 point, up from last week when it averaged 5.92 percent.
* Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent this week, with an average 0.5 point, up from last week when it averaged 5.92 percent.
* One-year Treasury-indexed ARMs averaged 5.64 percent this week with an average 0.6 point, up from last week when it averaged 5.48 percent.
“Stronger than expected consumer confidence and recent comments from members of the Federal Reserve (Fed) raised some inflation concerns in the market, causing it to lower expectations of a Fed rate cut this year. This helped push mortgage rates higher this week,” said Frank Nothaft, vice president and chief economist.
For Lou Barne’s national and global perspective and commentary on this week’s status of the mortage and housing market, visit Boulder West Mortgage Credit News.
Source: Freddie Mac