Mortgage Rate Dipped

Long term mortgage rates dipped for second consecutive week as several market indicators this week seemed to point to less of a threat of inflation. The short-term rates, however, rose in reaction to a recent speech by Chairman Bernanke, of the Federal Reserve Board, that hinted at even further rate hikes this year. The Federal Open Market Committee (FOMC) is meeting next week (Monday and Tuesday) and will probably hike the short term rate by 25 basis points.

According to Freddie Mac's weekly report, the benchmark 30-year fixed rate mortgage average fell in this week ending Thursday to 6.32% from 6.34%. Last year at this time, the 30-year FRM averaged 6.01%. The 15-year loan also fell slightly, to 5.97% from last week's average rate of 5.98%. A year ago, the 15-year rate averaged 5.56%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.96% this week, with an average 0.7 point, up from last week when it averaged 5.93%. A year ago, the 5-year ARM averaged 5.36%. The 1-year Treasury-indexed ARMs averaged 5.41% this week, with an average 0.7 point, UP from last week when it averaged 5.37%. At this time last year, the one-year ARM averaged 4.24%.