30-Year Mortgage Rates Jump
WASHINGTON (Reuters) - U.S. 30-year fixed mortgage rates posted their largest one-week jump since early December, but the increase is unlikely to slow the torrid housing market in 2004, mortgage finance company Freddie Mac said on Thursday.
Freddie Mac said 30-year mortgage rates averaged 5.52 percent in the latest week, up from 5.40 percent a week ago. It marks the largest one-week surge for benchmark rates since they rose to 6.02 percent in the Dec. 5, 2003 week from 5.89 percent.
Fifteen-year mortgages edged up to 4.84 percent, from an average of 4.70 percent in the prior week, while one-year adjustable rate mortgages also rose, to 3.46 percent from a record low of 3.36 percent.
Despite expectations mortgage interest rates would rise this year as the U.S. economy recovered, rates have dropped since the beginning of the year to levels close to the lows of last June as uncertainty about the recovery and job creation persisted.
"Even with rates slightly higher, the housing industry will continue to be an active, solid sector of the economy going into the spring buying season," Frank Nothaft, Freddie Mac's chief economist, said in a statement. "We don't foresee any major slowdown in the housing market this year."
A year ago, 30-year mortgage rates averaged 5.79 percent, 15-year mortgages 5.06 percent and the ARM 3.82 percent.
Bond yields rose this week, sending mortgage rates higher, on speculation that Friday's jobs data will finally show a revival in hiring, Nothaft said.
The median forecast of Wall Street firms polled by Reuters is for a March payrolls gain of 103,000, which would be the biggest monthly rise in employment since February 2001.
"The economy has been conducive to job gains for several months, but we have yet to see any significant rise in employment," Nothaft added.
Freddie Mac said lenders charged an average of 0.6 percent in fees and points on 30- and 15-year mortgages, down from 0.7 percent last week. They charged 0.6 percent on the ARM, unchanged from a week ago.
Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities for investors or holds them in its own portfolio.
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