Rising Rates Deflate MortgageMarket
McLEAN, Va. - (04/20/06) -- Home loan rates rose again this weekfor the fourth week in a row, to their highest level since July of2002, according to Freddie Mac. The higher rates are weighing onmortgage lending, with the number of applications running roughly15% less than they were last year at this time, according to theMortgage Bankers Association. This week, the average for thebenchmark 30-year, fixed-rate mortgage climbed to 6.53%, from 6.49%last week; while the average for the 15-year, fixed-rate loan movedup to 6.17%, from 6.14%. ARM rates also continued their upwardclimb, with the average for the one-year ARM hitting 5.63%, from5.61% last week; and the five-year ARM rate moving to 6.16%, from6.13%. Mortgage rates drifted upward this week following therelease of the Consumer and Producer Price Indexes for March, whichcame in at the upper end of market expectations for inflation, saidFrank Nothaft, chief economist for Freddie Mac As a result ofhigher mortgage rates, housing market activity is beginning toslow, as evidenced in the lower housing starts statistics forMarch.