U.S. mortgage rates rose for a third straight week, moving above 5 percent and reaching their second highest level this year, Reuters reported on a closely watched mortgage survey Thursday.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 5.08 percent for the week ended April 1, up from the previous week’s 4.99 percent, according to a survey released by Freddie Mac, the No. 2 U.S. mortgage finance company.
That is above the year-ago level of 4.78 percent as well as the record low of 4.71 percent in early December. Freddie Mac started the survey in 1971.
Stan Humphries, chief economist at real estate website Zillow.com, sees an upward trend in mortgage rates for the rest of this year, approaching 6 percent by the end of 2010.
“We are seeing some upward pressure on mortgage rates due both to increasing rates on U.S. Treasury notes and possible effects of the end of the Federal Reserve’s intervention in the mortgage-backed security market,” he said.
Mortgage rates were widely expected to rise when the Federal Reserve stopped buying mortgage-related securities at the end of March.
“Interest rates for fixed mortgages rose this week following a run up in long-term bond yields, while ARM rates eased slightly,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
“Rates on 30-year fixed loans were the highest since the starting week of this year,” he said.
Freddie Mac said the 15-year fixed-rate mortgage averaged 4.39 percent in the latest week, up from 4.34 percent the prior week. Interest rates on other types of loans fell.
One-year adjustable-rate mortgages (ARMs) were 4.05 percent in the latest week, down from 4.20 percent in the prior week. The rate on the 5/1 ARM, set at a fixed rate for five years and adjustable each following year, was 4.10 percent, compared with 4.14 percent a week earlier.
A year ago, 15-year mortgages averaged 4.52 percent, the one-year ARM 4.75 percent and the 5/1 ARM 4.92 percent.
