Mortgage rates rise, pushing home prices down
Rates up for second time in three weeks; 30-year fixed hits 6.40 percent.
NEW YORK (CNNMoney.com) -- Mortgage rates rose for the second time in three weeks, and the 30-year returned to levels of 5 weeks ago, according to a survey released Thursday.
The 30-year fixed-rate mortgage (FRM) averaged 6.40 percent for the week ending Oct. 26, up from 6.36 percent, according to Freddie Mac's (Charts) Primary Mortgage Market Survey. A year ago, the 30-year FRM averaged 6.15 percent.
The 15-year FRM averaged 6.10 percent this week, up from 6.06 percent last week. A year ago, it averaged 5.69 percent.
Rates for five-year adjustable-rate mortgages (ARMs) came in at 6.14 percent this week, up from 6.11 percent last week. A year ago, they averaged 5.63 percent.
One-year ARMs averaged 5.60 percent, up from 5.57 percent last week. A year ago, the one-year ARM averaged 4.91 percent.
"At its most recent meeting, the Federal Reserve again declined to raise rates for the third time, citing a slowdown in the housing market," said Frank Nothaft, Freddie Mac's chief economist, in a statement. "For instance, the median price of both new and existing homes in September posted significant decreases. And some areas of the country may experience a few bumps up and down as the housing industry corrects itself in the coming months."
"On a positive note, new home sales in September came in at a higher-than-expected pace. This should help support housing prices going forward."
Beware the mortgage time-bomb That ridiculously low-rate ARM seemed like such a good idea at the time. But now, payments will be coming due in a big, big way.
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