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Mortgage Rates Hit 4.46 Percent: Largest Weekly Hike in Nearly 30 Years

NationalMortgageProfessional.com
Jun 27, 2013

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates jumping along with bond yields amid recent Fed remarks that it could begin tapering its bond purchases later this year. The average 30-year fixed-rate mortgage (FRM) rose from 3.93 percent last week to 4.46 percent this week; the highest it has been since the week of July 28, 2011. Last year at this time, the 30-year FRM averaged 3.66 percent. This represents the largest weekly increase for the 30-year FRM since the week ending April 17, 1987. Despite recent gains in mortgage rates, homebuyer affordability remains strong for the typical family in most parts of the country, which should help fuel the ongoing housing recovery. Also this week, the 15-year FRM this week averaged 3.50 percent with an average 0.8 point, up from last week when it averaged 3.04 percent. A year ago at this time, the 15-year FRM averaged 2.94 percent.  "Following Fed chief Bernanke's remarks on June 19th about the possible timing of reduced bond purchases, Treasury bond yields jumped over the week and mortgage rates followed," said Frank Nothaft, vice president and chief economist, Freddie Mac. "He indicated that the Fed may moderate the pace of its buying later this year and end the purchases around the middle of 2014." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week with an average 0.7 point, up from last week when it averaged 2.79 percent. A year ago, the five-year ARM averaged 2.79 percent. The one-year Treasury-indexed ARM averaged 2.66 percent this week with an average 0.5 point, up from last week when it averaged 2.57 percent. At this time last year, the one-year ARM averaged 2.74 percent. "Higher mortgage rates may dampen some housing market activity, but the effect will be muted by the high level of buyer affordability, and home sales should remain strong," said Nothaft. "For instance, existing home sales in May rose to its strongest pace since November 2009 and new home sales were the most seen since July 2008. In addition, the 12-month growth in the S&P/Case-Shiller 20-city home price index for April of 12.1 percent was the largest since April 2006."  
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