After weeks of relative calm, mortgage rates climbed to the highest point since early February. Investors' nerves were rattled by a potential General Motors bankruptcy and a week of substantial government borrowing. Yields on benchmark Treasury yields increased as a glut of new supply hit the market, and the prospect of a significant corporate bankruptcy further agitated would-be bond investors. The result for mortgage shoppers was a rapid spike in rates. Now the ball is in the Federal Reserve's court, as they could step up the pace of their bond buybacks in an effort to reverse some of this week's increase. Whether or not they will take such measures, and how effective they would be, remains to be seen.
Mortgage rates remain significantly lower than one year ago. This time last year, the average 30-year fixed mortgage rate was 6.20 percent, meaning a $200,000 loan would have carried a monthly payment of $1,224.94. With the average rate now three-quarters of a percentage point lower at 5.45 percent, the monthly payment for the same size loan would be $1,129.31, a savings of $95 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 5.45% - up from 5.24% last week (avg. points: 0.41)
15-year fixed: 4.86% - up from 4.74% last week (avg. points: 0.41)
5/1 ARM: 4.94% - down from 4.96% last week (avg. points: 0.53)
