NEW YORK (CNN/Money) -
Mortgage rates moved higher, according to a survey released Thursday, as data on retail sales showed the economy may be recovering more quickly than previously thought, bringing fears of inflation back.
Freddie Mac reported that the 30-year mortgage averaged 6.89 percent in the week ending May 17, with an average of 0.7 point payable up front to the lender. The rate moved slightly higher from last week's average of 6.79 percent. The 30-year mortgage averaged 7.14 percent a year ago.
The 15-year fixed-rate mortgage averaged 6.37 percent, up from 6.27 percent last week and down from 6.67 percent a year earlier. The 15-year averaged 0.8 point payable up front.
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In addition, one-year adjustable-rate mortgages rose to 4.81 percent, with an average 0.8 of a point due up front, up slightly from 4.80 percent last week and down from and average of 5.81 percent a year ago.
"The market interpreted recently released retail sales figures as a sign that the economy may now be recovering faster than originally thought, bringing fear of inflation back into the picture," Freddie Mac chief economist Frank Nothaft said. "But the good news is that April's Consumer Price Index (CPI), which came out [Wednesday], indicates inflation remains under control. This should help keep mortgage rates stable for the foreseeable future."
Nothaft also noted that while April housing starts fell, mortgage rates continuing to hold below 7 percent should help the housing industry experience a good year.
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Freddie Mac (FRE: up $0.66 to $67.84, Research, Estimates), or Federal Home Mortgage Corp., is a publicly-traded company the government established 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 entities, have become increasingly popular as an alternative to government-backed bonds, particularly with international investors.
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