Freddie Mac: Mortgage Rates Increased On Fed Rate Hike Rumors

Fixed mortgage rates edged upward this week on rumors that the Federal Reserve might vote to raise short-term interest rates later this month.

During the week ended June 1, the average rate for a 30-year, fixed-rate mortgage (FRM) was 3.66%, up from 3.64% the week prior, according to Freddie Mac’s Primary Mortgage Market Survey.

The average rate for a 15-year FRM was 2.92%, up from 2.89%. A year ago at this time, the 15-year FRM averaged 3.08%.

The average rate for a five-year, Treasury-indexed, hybrid adjustable-rate mortgage (ARM) was 2.88%, up from 2.87%. A year ago, the five-year ARM averaged 2.96%.

“Since jumping 11 basis points on May 18th, the 10-year Treasury yield has leveled off around 1.85 percent,” says Sean Becketti, chief economist for Freddie Mac, in a release. “Mortgage rates continue to adjust to this new level, with the 30-year fixed rate inching up another two basis points this week to 3.66 percent. Recent statements by the Fed appear to have persuaded the market that a rate hike may come sooner than later. However, the market is fickle, and Friday’s employment report has the potential to swing opinion 180 degrees in the other direction.”

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