Mortgage Rates Finally Rise
11/03/2006

In the United States, the average interest rate on a 30 year mortgage has risen to 6.37 percent from 6.30 percent just last week. The rates on 15 year mortgages have also been climbing to 6.06 percent from 5.98 percent, and one-year adjustable rate mortgages have averaged 5.56 percent, which is a step up from last weeks 5.46 percent.

Only one year ago, 30 year mortgages averaged 6.03 percent, 15 year mortgages averaged 5.62 percent, and the one-year adjustable rate averaged 4.85 percent. Frank Nothaft, Vice-President of finance company, Freddie Mac, is concerned that inflation is pushing up the rates. "Renewed concern that inflation is still an issue put some upward pressure on bond yields, which generally translates into higher interest and mortgage rates," he said.

During a meeting in September, the Federal Reserve showed that officials at the central bank were also concerned about inflation. Freddie Mac said lenders charged 0.5 percent in fees on 30 year mortgages, up from 0.3 percent last week. They also confirmed that 0.5 percent was the charge on 15 years, up from last weeks 0.4 percent. Finally, the one-year adjustable rate mortgage was unchanged from last week at 0.7 percent.

The "5/1" adjustable rate mortgage, set at a fixed rate for five years and adjustable each following year, rose to an average 6.10 percent from 6.00 percent a week ago. Fees and points on the hybrid mortgage also rose, to 0.6 percent from 0.5 percent.

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