30-year mortgage at 8-week high
Biggest weekly jump in 21 years sends benchmark loan to 6.46%
CHICAGO (MarketWatch) -- Average rates on fixed-rate mortgages shot up this week, according to Freddie Mac's survey released Thursday.
The 30-year fixed-rate mortgage averaged 6.46% nationally for the week ending Oct. 16, up more than half a percentage point from last week's 5.94% average. This was the largest weekly increase since the week ending April 17, 1987, when the mortgage rate went up 0.84 percentage point, according to Freddie Mac. The mortgage averaged 6.40% a year ago.
"Interest rates for 30-year fixed-rate mortgages rose this week to an 8-week high," said Frank Nothaft, Freddie Mac chief economist, in a news release.
Rates on 15-year fixed-rate mortgages also shot up, averaging 6.14% this week, up from last week's 5.63%. The mortgage averaged 6.08% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages also rose, averaging 6.14% this week, up from last week's 5.90%. The ARM averaged 6.11% a year ago.
Meanwhile, 1-year Treasury-indexed ARMs barely moved, averaging 5.16% this week, up from last week's 5.15%. The ARM averaged 5.76% a year ago.
"ARM rates, which tend to be based on shorter-term benchmarks, showed smaller gains in part due to the Federal Reserve's Oct. 8 intermeeting rate cut in the overnight lending rate," Nothaft said.
To obtain the rates, all mortgages in the survey required payment of an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.
"Recent economic reports suggest the economy is still slowing," Nothaft said in his comments. "For instance, retail sales fell, for the third consecutive month, by 1.2% in September. In addition, in its latest Beige Book, released [Wednesday], the Federal Reserve indicated that economic activity weakened in September across all 12 Federal Reserve districts and that several districts also noted that their contacts had become more pessimistic about the economic outlook."
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