Mortgage rates climb to 6-month high

By Dow Jones Newswires
Posted Dec. 9, 2010 at 12:57 p.m.

U.S. mortgage rates extended their bounce from recent record lows in the latest week, according to Freddie Mac’s weekly survey of mortgage rates, as Treasury yields continue to climb.

The 30-year fixed-rate mortgage averaged 4.61 percent for the week ended Thursday, up from the prior week’s 4.46 percent but down from 4.81 percent a year ago.

The average has now risen for fourth straight weeks and is at a 6-month high. The average on 15-year fixed was 3.96 percent, compared with 3.81 percent and 4.32 percent, respectively.

Rates have been rising after steadily falling through October, helping mortgage rates set a string of record lows. The 10-year Treasury yield has surged from this year’s low of 2.332 percent in October–hitting a six-month high Wednesday–as many recent economic figures have been better than forecast and on fresh concerns about the U.S. government’s budget deficit.

Mortgage rates generally track Treasury yields, which move inversely to their price.

Freddie Mac Chief Economist Frank Nothaft also cited Europe making “strides in its debt situation” and recent signs “housing demand appears to be picking up” in luring some investors from the security of U.S. Treasurys for riskier assets.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.6 percent, up from the previous week’s 3.49 percent but down from last year’s 4.26 percent. One-year Treasury-indexed AMRs were 3.27 percent, compared with 3.25 percent and 4.24 percent.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the adjustables had an average 0.6 point. A point is 1 percent of the mortgage amount, charged as prepaid interest.

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