Mortgage rates continued to climb this week, but the near-term future is going to depend on how the Federal Reserve reacts.[IMAGE]
According to ""Freddie Mac's"":http://www.freddiemac.com/ Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.98 percent (0.7 point) for the week ending June 13, up from 3.91 percent last week. Last year at this time, the 30-year FRM averaged 3.71 percent.
The 15-year FRM this week averaged 3.10 percent (0.7 point), up from 3.03 percent in the last survey.
Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent (0.6 point), an increase from 2.74 percent. The 1-year ARM was flat at 2.58 percent (0.4 point).[COLUMN_BREAK]
Frank Nothaft, VP and chief economist at Freddie Mac, said there has been a shift in demand as rates continue their upward trend.
""With the ongoing run up in fixed mortgage rates, adjustable-rate mortgages (ARM) are becoming more popular among homeowners looking to refinance and for home purchasers,"" Nothaft said, noting that the share of conventional mortgage applications for ARMs rose from 13 percent at the beginning of May (the most recent low) to 17 percent last week (according to data from the Mortgage Bankers Association).
""Bankrate.com's"":http://www.bankrate.com/ weekly national survey shows the 30-year fixed setting a new 14-month high of 4.14 percent, while the 15-year fixed average was up to 3.32 percent.
At the same time, the 5/1 ARM climbed to an even 3.00 percent.
""All eyes now turn to the Federal Reserve, with next week holding a meeting of the Federal Open Market Committee followed by Ben Bernanke's press conference,"" Bankrate said in a release. ""Long-term interest rates--to which mortgage rates are closely related--have jumped in recent weeks on speculation that the Fed will decrease the amount of monthly bond-buying stimulus. Where mortgage rates go from here is dependent on what comes out of next week's Fed meeting.""