Freddie Mac Survey Finds Rates Rise as Treasury Yields Spike

The average weekly rate for the 30-year fixed rate mortgages that dominate the market rose to 4.91% from 4.82% as the benchmark 10-year Treasury yield spiked to a high not seen since late last year, according to the latest Freddie Mac Primary Mortgage Market Survey. The 10-year yield just after noon on May 28 was at 3.68%, up from what had been a range closer to 3.4% earlier the same week. The benchmark yield has not been that high since November 2008. "Fixed-rate mortgage rates followed long-term bond yields higher this week as financial markets try to discern the state of the economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Consumer confidence rose again in May and represented the largest two-month rally since records began in 1967. According to the National Association for Business Economics, the consensus of a recent survey of 45 professional forecasters called for the recession to end in the second half of this year, but the recovery is to be more moderate than the previous survey. Housing continues to be a drag on the economy, however."