Mortgages rate rise sharply

By Palm Beach Business.com

DELRAY BEACH — Low mortgage rates, one of the he forces lifting home sales the past few months, aren’t quite as low as they were a week ago.

Freddie Mac’s Primary Mortgage Market Survey, released Thursday, put the average 30-year fixed-rate mortgage at 4.91 percent with an average 0.7 point, up from 4.82 percent a week ago.

Still, it’s a bargain compared to a year ago, when the 30-year averaged 6.08 percent

Bankrate.com, meanwhile, put the 30-year at  5.45 percent, up from 5.24 percent last week.

"Fixed-rate mortgage rates followed long-term bond yields higher this week as financial markets try to discern the state of the economy," Freddie Mac’s Chief Economist Frank Nothaft said. "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.”

Bankrate similarly cited spiking Treasury yields.  As the government put out another batch of paper, the prospect of a General Motors loomed larger, agitating bond investors, and pushing up yields.

The Federal Reserve could calm matters by stepping up the pace of  bond buybacks. Whether it will take such measures, and how effective they would be, remains to be seen, Bankrate said.

Other rates from the Freddie Mac survey: the 15-year fixed rate averaged 4.53 percent with an average 0.7 point, up from last week’s 4.50 percent.

Five-year adjustable-rate mortgages averaged 4.82 percent this week, with an average 0.6 point, up from 4.79 percent

One-year ARMs averaged 4.69 percent this week with an average 0.6 point, down from last week’s 4.82 percent.

Also from the Bankrate survey: the average 15-year fixed rate mortgage climbed to 4.86 percent, while the average jumbo 30-year fixed rate rebounded to 6.60 percent. Adjustable rate mortgages were mixed, with the average 1-year ARM notching higher to 5.03 percent and the 5-year ARM retreating to 4.94 percent.

Bankrate's panel of mortgage experts sees rates continuing to rise. Sixty-four percent of the panelist concur; 36 percent see rates falling.