Bankrate: Mortgage Rates Highest in Nearly 4 Years8 April 2006
Fixed mortgage rates climbed again, with the average 30-year fixed rate mortgage rising to 6.51 percent, according to Bankrate.com's weekly national survey of large lenders. This is the highest since the week of July 17, 2002. The 30-year fixed rate mortgages in this week's survey had an average of 0.32 discount and origination points.
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The average 15-year fixed rate mortgage, popular for refinancing, stepped up to 6.17 percent, and the average jumbo 30-year fixed rate jumped from 6.64 percent to 6.68 percent. Adjustable rate mortgages also staged increases, with the average 5/1 adjustable rate mortgage rising from 6.13 percent to 6.17 percent, and the average one-year ARM notching higher from 5.77 percent to 5.83 percent.
Mortgage rates hit the highest point in nearly four years as bond investors come to grips with the idea that short-term interest rates are headed even higher and the economy is still firing on all cylinders. In addition, an inflation gauge often used by the Fed showed a strong advance during the fourth quarter of 2005, rising at a 3.5 percent annualized pace. This is not the type of news that will get the Fed to stop raising interest rates. As a result, with the overnight cost of borrowing headed to 5 percent in May, the cost of borrowing for ten or more years is also re-pricing higher. Fixed mortgage rates are closely related to yields on long-term government bonds. Still, the difference between short-term and long-term interest rates is very scant, meaning home shoppers are likely to see continued increases in coming months.
Fixed mortgage rates are approximately one-half of a percentage point higher than one year ago. This time last year, the average 30-year fixed mortgage rate was 6.02 percent, meaning that the monthly payment on a loan of $165,000 was $991.38. With fixed mortgage rates moving in a choppy fashion since, the average 30-year fixed rate is now 6.51 percent, meaning the same loan originated now would carry a payment of $1,044.00. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers.
SURVEY RESULTS
30-year fixed: 6.51% -- up from 6.44% last week (avg. points: 0.32)
15-year fixed: 6.17% -- up from 6.12% last week (avg. points: 0.35)
5/1 ARM: 6.17% -- up from 6.13% last week (avg. points: 0.35)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
For a full analysis of this week's move in mortgage rates, go to: http://www.bankrate.com/mortgagerates
The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. This week, 57 percent of panelists predict rates to continue climbing. Only 14 percent expect rates to fall, while 29 percent say rates will remain unchanged in coming weeks.
For the full mortgage Rate Trend Index, go to: http://www.bankrate.com/RTI
About Bankrate, Inc.
Bankrate, Inc. (Nasdaq: RATE) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. It is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2005, Bankrate.com had over 46 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: TWX), The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates FastFind, an internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.
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Source: prnewswire
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