|
Mortgage rates on the rise
|
 |
May 11, 2000: 3:19 p.m. ET
Home loan interest rates at nine-year high, in anticipation of Fed decision
|
NEW YORK (CNNfn) - Mortgage rates jumped last week, according to a survey released Thursday by Freddie Mac.
The average rate on a 30-year fixed rate mortgage was 8.52 percent for the week ending May 12, up from 8.28 a week earlier.
The same mortgage was 7.02 percent one year ago.
The average for a fixed-rate 15-year mortgage was 8.17 percent this week, the highest since the week ended March 10, 1995, when it averaged 8.24 percent.
A week earlier the 15-year rate was 7.94 percent, and twelve months ago the same loan averaged 6.71 percent.
 A one-year adjustable rate mortgage (ARM) averaged 6.96 percent, up from the previous week's 6.90 percent and the highest since the week of August 23, 1991, when it averaged 7.03 percent.
The same mortgage averaged 5.71 percent one year ago.
"Long-term interest rates jumped this week in anticipation of the Fed's action next week," said Robert Van Order, chief economist for Freddie Mac. "News that inflation finally reared its ugly head has increased the perception that the Fed will raise rates by 50 basis points, instead of the 25 that had been previously expected, so the markets have priced in the additional 25 basis points."
[Click here to see a breakdown of U.S. mortgage rates by region.]
Van Order said Friday's Producer Price Index and next week's Consumer Price Index will have a significant effect on the depth of inflation, directly impacting future mortgage rates.
Freddie Mac (FRE: Research, Estimates), or Federal Home Mortgage Corp., is a publicly traded company that the government set up in 1970 to provide a flow of funds to mortgage lenders.
It buys mortgages from banks, bundles them, and then resells them as mortgage-backed securities. Its products and the products of other similar agencies have become increasingly popular as an alternative to government-backed bonds, particularly with international investors. 
|
|
|
|
|
 |
|
