Freddie Mac released its Primary Mortgage Market Survey this morning. They saw increases in rates across the board. 30-year fixed rate mortgages increased from 4.87 percent to 4.91 percent. The average rate on a 15 year fixed rate mortgage increased 3 basis point to 4.13 percent. 5/1 ARMs went from 3.72 percent to 3.78 percent, and 1 year ARMs increased 3 basis points to 3.25 percent.
The rate increases occurred as investors moved money from the bond market to the stock market over the past few weeks because the stock market has rallied. As bond prices fell, bond yields increased, taking mortgage rates with them.
Mortgage rates have increased fairly steadily since they hit their all-time lows last October. Since then the average rate on a 30-year fixed rate mortgage has increased more than 80 basis points. Freddie Mac predicted that mortgage rates could go as high as 5.5 percent by the end of the year. Although it is difficult to say with any certainty where rates will be in 6 months, the current trend points upward.
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