30-Year Mortgage Rates Jump
- 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
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,"
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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