Strong Economic Growth Keeps Upward Pressure On Mortgage Rates
April 7, 2006
McLean, VA – Freddie Mac's Primary Mortgage Market SurveySM (PMMSSM) found the 30-year fixed-rate mortgage (FRM) averaged 6.43 percent, with an average 0.6 point, for the week ending April 6, 2006, up from last week’s average of 6.35 percent. Last year at this time, the 30-year FRM averaged 5.93 percent.
The average for the 15-year FRM this week is 6.10 percent, with an average 0.5 point, up from last week’s average of 6.00 percent. A year ago, the 15-year FRM averaged 5.48 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.11 percent this week, with an average 0.6 point, up from last week when it averaged 6.02 percent. A year ago, the five-year ARM averaged 5.33 percent.
One-year Treasury-indexed ARMs averaged 5.57 percent this week, with an average 0.7 point, up from last week when it averaged 5.51 percent. At this time last year, the one-year ARM averaged 4.23 percent.
“In the first quarter of 2006, it appears that economic growth picked up relative to the last three months of 2005. There is concern that the continued high level of energy cost may lead to inflation in other sectors of the economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “And fear of inflation leads to higher mortgage rates, like the ones we see this week."
“Our forecast for the year as a whole is for economic growth of 3.8 percent in 2006, above the 3.2 percent in 2005, which may warrant even more Fed rate hikes than previously expected. If that is the case, mortgage rates may continue their gradual upward trend.”
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Source: Freddie Mac