Fixed-Rate Mortgages Spike to 3.81 Percent

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing fixed mortgage rates following long-term government bond yields higher, as the average 30-year fixed-rate mortgage (FRM) moved up nearly half a percentage point since the beginning of May when it averaged 3.35 percent, hitting 3.81 percent with an average 0.8 point for the week ending May 30, 2013, up from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 3.75 percent. The 15-year FRM averaged 2.98 percent with an average 0.7 point, up from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 2.97 percent.  "Fixed mortgage rates followed long-term government bond yields higher following a growing market sentiment that the Federal Reserve may lessen its accommodative policy stance. Improving economic data may have encouraged those views," said Frank Nothaft, vice president and chief economist of Freddie Mac. "For instance, the Conference Board reported that confidence among consumers rose in May to its highest level since February 2008. Meanwhile, the S&P/Case-Shiller 20-city compositeindex for March rose to its highest reading since November 2008 (seasonally adjusted). All 20 cities had positive monthly gains, led by a 3.2 percent increase in Las Vegas." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.66 percent this week with an average 0.5 point, up from last week when it averaged 2.63 percent. A year ago, the five-year ARM averaged 2.84 percent. The one-year Treasury-indexed ARM averaged 2.54 percent this week with an average 0.5 point, down from last week when it averaged 2.55 percent. At this time last year, the one-year ARM averaged 2.75 percent.