Mortgage rates soar
30-year loan takes biggest weekly jump since 1998
By Kristen Gerencher, CBS.MarketWatch.com
Last Update: 3:09 PM ET July 24, 2003
SAN FRANCISCO (CBS.MW) - The days of 45-year low mortgage rates may be numbered as the benchmark 30-year loan took its biggest weekly jump in nearly five years.
The average 30-year fixed-rate mortgage leaped to 5.94 percent, up from 5.67 percent last week, according to Freddie Mac. The last time that rate rose so swiftly in a seven-day period was in October, 1998.
Rates climbed for the fifth straight week from a 45-year low of 5.21 percent in the week of June 16, as investors factored in the government's budget deficit expectations and positive economic indicators, Freddie Mac chief economist Frank Nothaft said.
"The government will be absorbing funds in the credit markets to fund the deficit at the same time that business credit demands will be increased because of greater economic growth," Nothaft said. "That paints a picture of very strong credit demands in the future, which leads to interest rates being bid up in the marketplace."
The 15-year fixed-rate mortgage ballooned to 5.27 percent on average, up from 5 percent last week. One-year adjustable-rate mortgages (ARMs) averaged 3.67 percent this week, up from last week's 3.58 percent.
The average rates for the 30-year fixed-rate mortgage carried an average 0.4 point, and the 15-year fixed-rate and 1-year ARM carried an average 0.5 point, according to Freddie Mac. |
