Mortgage Rates Up Again This Week, 30-Year Fixed At 5.59%-Freddie

   DOW JONES NEWSWIRES 
 

Mortgage rates jumped again this week, to their highest levels in seven months as bond yields rose, and the average rate on 30-year fixed-rate mortgages moved further above 5%, according to Freddie Mac's (FRE) weekly survey of mortgage rates.

Mortgage rates had fallen in recent months as providers tried to entice buyers amid the housing market downturn. But Treasurys have continued to fall in price amid worries of the flood of supply being sold by the federal government to finance its ballooning deficit.

The 30-year fixed-rate mortgage averaged 5.59% for the week ended Thursday, up from last week's 5.29% but down from 6.32% a year ago.

Rates on 15-year fixed-rate mortgages were 5.06%, up from 4.79% last week but down from 5.93% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.17%, up from 4.85% last week but well below 5.51% a year ago. One-year Treasury-indexed ARMs were 5.04%, up from 4.81% last week but down slightly from 5.09% a year ago.

To obtain the rates, the fixed-rate mortgages and the one-year ARM required payment of an average 0.7 point and the five-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Freddie Mac Vice Preident and Chief Economist Frank Nothaft said federal-funds futures rose after last week's May employment report came in better than expected, signaling the market expects the Federal Reserve may raise its benchmark rate sooner rather than later.

He added higher rates are slowing refinancing activity but not demand for home purchases.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]