Thursday, June 22, 2006

Mortgage Rate Up Again

The mortgage rate moved up again this week. Also, ahead of next week's Federal Reserve monetary policy meeting, the yield on the benchmark 10-year Treasury note ran up to 5.2% in the final hour of trading today. The central bank is expected to hike the overnight lending interest rate to 5.25% at the meeting.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.71% in the week that ended today -- higher than its 6.63% average last week. At this time last year, the loan averaged 5.57%. The 30-year mortgage has not been higher since the week ending May 31, 2002, when it averaged 6.76%. The 15-year fixed rate averaged at 6.36% this week, up from last week's 6.25%. At this time last year this rate was 5.16%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) also went up this week to 6.32% from 6.23% last week. This rate averaged 5.05% a year ago. The 1-year Treasury-indexed ARMs also moved up this week to 5.75%, from 5.66% last week. At this time in 2005, the ARM averaged 4.23%.

Despite recent rate fluctuations and an underlying upper trend, Freddie Mac still predicts 2006 will be the 3rd strongest year on record for the housing sector.


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