Gradual rise in fixed rate mortgage rates continued this week!

This week, Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) averaged 6.59% (with an average of 0.6 points) for the week ending May 4, 2006. This average is slightly HIGGER from last week; which was at 6.58%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.21% for the same week (with an average of 0.7 points). This average remained UNCHANGED from last week when it averaged 6.21%.

One-year Treasury-indexed ARMs averaged 5.67% for the same week (with an average of 0.8 points). This average went slightly LOWER from last week when the average was at 5.68%.

Frank Nothaft, Freddie Mac vice president and chief economist, explained “Mortgage rates have drifted upward for the sixth week running, which is consistent with Freddie Mac’s economic forecast” “We expect that mortgage rates will continue to trend upward over the coming year, but that upward trend will be modest at best” “Meanwhile, with gradually rising rates, refinance activity can be expected to shift. Fewer families will be refinancing, but of those who are, a larger percentage will be drawing some equity out of their homes, many to pay off previously existing home equity loans and lines of credit as those loans become more expensive.”

Attention everyone with an interest only, option arm or a short term hybrid arm, don’t wait until interest rates creep up more, refinance for a fixed rate mortgage or a long term hybrid arm and take advantage NOW of the slow rise on interest rates.


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May 5th, 2006 · Filed Under Keeping an Eye on the Market

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