Mortgage rates inched up again over the past week as the markets questioned whether the Federal Reserve would lift its key interest-rate target to thwart inflation according to Freddie Mac's (FRE) weekly survey.
Freddie Chief Economist Frank Nothaft called the fixed-rate mortgages "relatively stable," but noted that ARM rates rose a bit more "due to market uncertainty over how the Fed might respond."
Long-term fixed-rate mortgages are at a 10-month high, with the average rate for a 30-year FRM at 6.45% during the week ended Thursday. The upfront payment was 0.6 of a point. Those mortgages were 6.42% a week ago and 6.67% a year ago.
Fixed-rate mortgages with a shorter 15-year term rose to 6.04% with the same upfront payment from 6.02% a week earlier. Those rates are still lower than the 6.34% level a year earlier.
Five-year hybrid adjustable-rate mortgages that are indexed to Treasury notes rose to 5.99%, with a 0.7 point upfront payment, from 5.89% last week. A year ago, the 5-year ARM averaged 6.30%.
One-year Treasury-indexed ARMs averaged 5.27% with a 0.6 point payment, up from 5.19%. A year ago, those rates averaged 5.65%.
Nothaft noted that the housing market has begun to show some encouraging signs, although seasonality may play a role. Home-price declines, as measured by the S&P Case Shiller index, have decelerated, and prices rose in eight cities in April. New-home sales also increased in May.
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