Mortgage rates surge; highest since October
U.S. 30-year fixed rate up to 6.34 percent from 6.25 percent amid strong economic growth.
NEW YORK (CNNMoney.com) -- Moderate inflation along with a strong economic growth pushed up mortgage rates, according to a survey.
The 30-year fixed-rate mortgage rate averaged 6.34 percent for the week ended Feb. 1, up from 6.25 percent the previous week, according to Freddie Mac's (up $0.68 to $65.61, Charts) Primary Mortgage Market Survey released Thursday. Last year, the 30-year fixed mortgage rate stood at 6.23 percent.
The 30-year fixed rate hasn't been higher since the week ended Oct. 26.
"Interest rates moved higher following the latest upbeat economic news," said Freddie Mac Vice President Frank Nothaft in a statement. "The strong 3.5 percent annualized growth in the economy over the final quarter of 2006 occurred while inflation moderated."
"Solid economic growth and tepid inflation contributed to the Fed's decision to leave the target short-term interest rate unchanged," Nothaft said.
The 15-year fixed rate averaged 6.06 percent, up from last week when it averaged 5.98 percent. A year ago, it averaged 5.81 percent.
The 15-year fixed rate also hasn't been higher since Oct. 26, when it was 6.10 percent.
The five-year adjustable rate mortgage averaged 6.04 percent, up from last week when it averaged 6.00 percent. A year ago, the five-year averaged 5.87 percent.
One-year ARMs averaged 5.54 percent, up from 5.49 percent. Last year at this time, the one-year ARM averaged 5.33 percent.
"The Fed indicated in its statement that there are some tentative signs of stabilization that have appeared in the housing market," Nothaft said.
"December's existing and new home sales confirmed that 2006 was a year of significant decline in housing activities, but 2006 was still in the top three years for total home sales," he added.
Lending companies affected by the mortgage rates changes include Countrywide Financial Corp. (up $0.55 to $44.03, Charts) and Wachovia (up $0.04 to $56.54, Charts), while major homebuilders sensitive to the size of the housing market include Pulte (down $0.42 to $33.92, Charts), Centex Corp (up $0.07 to $53.76, Charts)., and D.R. Horton Inc. (up $0.84 to $29.90, Charts)