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Freddie Mac and Bankrate find mortgage rates surging

By Palm Beach Business.com

DELRAY BEACH — Good news on the economy translated into bad news for borrowers as mortgage rates surged to the highest levels this year, according to Freddie Mac and Bankrate surveys released Thursday.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage averaging 4.08 percent with 0.8 point, up from 3.92 percent a week ago. It’s the highest the rate for the 30-year since Oct. 27.

Bankrate, meanwhile, had the 30-year averaging 4.29 percent with 0.42 point, up from 4.15 percent a week ago.

“Bond yields rose over the past two weeks in part due to an improving assessment of the state of the economy by the Federal Reserve, better than expected results of commercial bank stress tests and the likelihood of a second bailout for Greece,” Freddie Mac Chief Economist Frank Nothaft said.

Mortgage rates tend to move in step with U.S. Treasury bond rates. Treasury rates tend to rise as the economy improves and stocks become more attractive to investors.

Bankrate noted that despite the sudden increase, mortgage rates are still at extremely attractive levels, not only for homebuyers but for homeowners looking to refinance, including those now eligible to do so through the revised Home Affordable Refinancing Program.  

The 15-year fixed rate mortgages shot upwards in both surveys as well. Freddie Mac had it averaging 3.30 percent with 0.8 point, up from 3.16 percent a week ago. Bankrate had it at 3.48 percent with 0.32 point, up from 3.38 percent a week ago.

Adjustable rate mortgages also moved higher in both surveys.