Fixed Rates Top Last Year Levels in Freddie Survey

Fixed mortgage rate averages in Freddie Mac’s weekly survey have been rising, but they were below year ago rates until now.

"Fixed mortgage rates followed long-term government bond yields higher following a growing market sentiment that the Federal Reserve may lessen its accommodative policy stance,” Freddie Mac vice president and chief economist Frank Nothaft said in his weekly rate report.

During the week ending May 30, the average rate for a 30-year fixed rate mortgage was up 22 basis points compared to the previous week at 3.81%, and the average 15-year FRM was up 21 basis points at 2.98%. This puts both of these rates above their year ago weekly averages, which were 3.75% for 30-year fixed rate mortgages, and 2.97% for 15-year FRMs.

Also the long-term rate indicative 10-year Treasury yield, which had been below 2%, recently rose above that level. It was 2.12% at deadline early Thursday, according to Yahoo! Finance.

The average 30-year mortgage rate is up almost 50 basis points compared to the beginning of May, when it was 3.35%, Freddie Mac noted, adding that the current rate is still historically attractive and could yet fuel more home purchases.

Rates are still lower than a year ago for short-term loan products in Freddie’s survey. The average rate for a five-year Treasury-indexed hybrid averaged 2.66% this week. This is up from 2.63% the previous week but it is still lower than 2.84% a year ago. The average rate for a one year Treasury-indexed adjustable-rate mortgage during the most recent week was 2.54%. This is down one basis point from the previous week and 21 basis points from a year ago.

Averages as far as points during the most recent week were as follows: 0.5 of a point for one-year Treasury ARMs and five-year Treasury hybrids, 0.7 of a point for 15-year FRMs and 0.8 of a point for 30-year FRMs.