Inflation Fears Push Mortgage Rates Higher

After three weeks without any movement, rates for 30-year fixed-rate mortgages rose 0.15 percentage points last week to an average of 6.03% with 0.3 point, according to the Freddie Mac Primary Mortgage Market Survey.

Analysts blame the sudden jump in rates on increased concerns over inflation. "March's index of leading indicators showed a tepid increase of 0.1 percent, after five consecutive months of decline," says Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, trading of federal funds futures contracts implied a reduced likelihood of a substantial rate cut at the next Federal Open Market Committee meeting."

The other three mortgage rates recorded in the survey also jumped on the news. The rates for 15-year FRMs reached 5.62% with 0.3 point -- up almost an entire quarter percentage point from last week's average of 5.40% with 0.5 point. The average rate for 5/1-year adjustable rate mortgages rose to 5.68%, up 0.20 percentage points and 1-year ARMs rose a similar 0.19 percentage points to 5.29% with 0.5 point. ...