NEW YORK (CNN/Money) -
The Federal Reserve's decision to cut interest rates by 25 basis points (one-quarter percentage point), accompanied by the indication that it's neutral to future moves, lifted mortgage rates off of 45-years lows.
The 30-year mortgage rate rose to 5.24 percent in the week ending June 27, up from 5.21 percent a week earlier, with an average of 0.6 of a point payable up front, mortgage lender Freddie Mac reported Thursday. The 30-year averaged 6.55 percent a year ago.
The 15-year fixed-rate mortgage rose slightly to 4.63 percent, with 0.6 of a point up front, up from 4.62 percent last week, but well below the 5.99 percent level of a year ago.
But one-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, dropped to 3.45 percent, down from 3.51 percent last week. At the same time last year, the one-year ARM averaged 4.61 percent.
"There were further signs this week that the economy may be finally taking a turn for the better," said Frank Nothaft, Freddie Mac's chief economist. "Evidence of this change in momentum can be seen in the Fed's remarks yesterday that it was taking a neutral bias in terms of future intervention."
Freddie Mac's average mortgage rates are based on a survey of 125 lenders nationwide. The rates include those on mortgages accepted by borrowers with good credit ratings who place a 20 percent down payment on their homes, according to Freddie Mac. The total amount of each mortgage considered for the survey doesn't exceed a $322,700 limit.
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Freddie Mac (FRE: down $0.72 to $50.11, Research, Estimates), or Federal Home Loan 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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