Mortgage rates rise this week was caused by the fear of inflation!

This week, Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) averaged 6.67% (with an average of 0.4 points) for the week ending June 1, 2006. This average is HIGHER from last week; which was at 6.62%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.26% for the same week (with an average of 0.5 points). This average went HIGHER from last week when it averaged 6.21%.

One-year Treasury-indexed ARMs averaged 5.68% for the same week (with an average of 0.7 points). This average went HIGHER from last week when the average was at 5.61%.

Frank Nothaft, Freddie Mac vice president and chief economist, explained “The Fed released the minutes of its most recent FOMC meeting, which showed that some members were concerned about inflationary pressure. This caused the bond market yields to rise, and brought about market speculation that the Fed may hikes rates sooner than had been expected,” ”All this combined to nudge rates up again this week”

If you are thinking about refinancing those interest only, option arm or a short term hybrid arm, do it now get an fixed rate mortgage or a long term hybrid arm.

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June 2nd, 2006 · Filed Under Keeping an Eye on the Market

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