Fixed Rates Rise

The average 30-year fixed mortgage rate rose from 5.98% to 6.08% over the seven-day period ended May 29, according to Freddie Mac's Primary Mortgage Market Survey. The average 15-year fixed mortgage rate rose from 5.55% to 5.66%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages increased from 5.61% to 5.62%, and the average rate for one-year Treasury-indexed ARMs fell from 5.24% 5.22%, Freddie Mac reported. Fees and points averaged 0.6 of a point for 30-year fixed-rate mortgages and 0.6 of a point for 15-year fixed-rate mortgages and ARMs. "Mortgage rates drifted up this week over market concerns that the Federal Reserve Board may raise short-term rates later this year," said Frank Nothaft, Freddie Mac's chief economist. "A recent working paper published by the Federal Reserve Bank of Minneapolis suggested that the recent rate cuts run a risk of unhinging long-term market expectations for inflation. Indeed, market inflation expectations increased over the last few weeks and the federal funds futures market now has a 25 basis point rate hike priced in by the end of the year." A year ago, the average 30-year and 15-year fixed mortgage rates were 6.42% and 5.55%, respectively, and the average hybrid and one-year ARM rates were 5.62% and 6.19%, Freddie Mac said.