30-year rates hit 6.3%, ARMs rocket up 1-year ARM at highest rate in over three years, at 5.09 percent. November 3, 2005: 12:16 PM EST
Mortgage Rates
30 yr fixed mtg
5.26%
15 yr fixed mtg
4.58%
30 yr fixed jumbo mtg
6.01%
5/1 ARM
4.41%
5/1 jumbo ARM
4.70%
NEW YORK (CNN/Money) - The average rate on 30-year fixed-rate mortgages rose to 6.31 percent this week from last week's 6.15 percent, a Freddie Mac survey said Thursday.
In the year-ago period, the 30-year mortgage averaged 5.70 percent.
One-year adjustable-rate mortgages averaged 5.09 percent, up from 4.91 percent the week before. At this time last year, the one-year loan averaged 4.00 percent. This is the highest the one-year ARM has been since March 2002.
The average rate on 15-year fixed-rate mortgages rose to 5.85 percent, up from 5.69 percent the previous week. A year ago, the loan averaged 5.08 percent.
Five-year adjustable-rate mortgages averaged 5.76 percent, compared to 5.63 percent the previous week. There is no data available for a year-to-year comparison because Freddie Mac only began tracking the 5-year loans this year.
As rates rise, so will the prospective home buyers' monthly mortgage payment, and the housing market could cool as it sees fewer potential buyers.
But analysts disagree over what type of rate rises it would take to usher in this scenario.
"The number which we believe will cause tangible cooling is 6.5 percent," said Daniel Jester, an analyst with Economy.com. "But because so many people have already bought into the market, the number could even be a bit lower."
When mortgage rates rise, a family either needs more income or has to buy a less expensive home.
The median U.S. home price in August was $219,400. To afford a home at that price with a 30-year mortgage at 6 percent, a home buyer would have to make monthly payments of around $1,320.
At a mortgage rate of 6.5 percent, that figure rises to $1,387 a month.
When higher 30-year rates do take hold, who will be hurt the most?
"First-time buyers will definitely feel it," said Nick Retsinas, Director of Harvard's Joint Center for Housing Studies. "In many markets, there's been such upward price pressure that the only way people have been able to get into home is through low rates."
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For a look at how the Federal Funds rate is swaying home loans, click here.
What effect will escalating 30-year rates have? Read more here.
