Mortgage Rates Spike to 2-Year Highs
Freddie Mac released its weekly update on national mortgage rates this morning, revealing numbers that show a sharp spike in rates nearly across the board, to levels not seen in two years.
Thirty-year fixed rate mortgages (FRM) jumped 22 basis points in the most recent week to hit 4.51%. Fifteen-year FRMs tacked on 14 basis points to reach 3.53%. In both cases, these numbers exceed the relatively high levels that caused investors concern two weeks ago.
Among variable-rate mortgages, 5/1 ARMs experienced the sharpest weekly rise of all four major mortgage classes tracked by Freddie Mac, rising 16 basis points to 3.26%. The closest thing to "good" news in the report was that one-year adjustable rate mortgages held steady at 2.66% for their third straight week.
Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the sharp hikes in rates to "June's strong employment," which "led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed."
This speculation may, however, have been premature. As Nothaft noted: "the minutes of the June 18th and 19th Federal Reserve's monetary policy committee meeting, released July 10th, stated that many members indicated further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of bond purchases."
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