Rates Rise; ARMs Hit 5-Year High

The average 30-year fixed mortgage rate rose from 6.62% to 6.67% over the seven-day period ended June 1, and the one-year ARM rate hit its highest level in nearly five years, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate rose from 6.23% to 6.26%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages rose from 6.21% to 6.26%, and the average rate for one-year Treasury-indexed ARMs climbed from 5.61% to 5.68%, its highest level since the 5.71% recorded in the week ended Aug. 17, 2001, Freddie Mac reported. Fees and points averaged 0.4 of a point for fixed-rate mortgages, 0.5 of a point for hybrid ARMs, and 0.7 of a point for one-year ARMs. "The [Federal Reserve Board] released the minutes of its most recent [Federal Open Market Committee] meeting, which showed that some members were concerned about inflationary pressure," said Frank Nothaft, Freddie Mac's chief economist. "This caused the bond market yields to rise, and brought about market speculation that the Fed may hike rates sooner than has been expected. All this combined to nudge rates up again this week." A year ago, the average 30-year and 15-year fixed rates were 5.62% and 5.20%, respectively, and the average one-year ARM rate was 4.26%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.