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Rates on 30-year mortgages jump to highest level in 7 months
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Rates on 30-year mortgages jumped to the highest level in seven months as hopes diminished for Federal Reserve rate cuts any time soon.
Mortgage giant Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.37 percent nationwide this week, up from 6.21 percent last week. It was the highest level for 30-year mortgages since they averaged 6.40 percent the week of Oct. 26.
Analysts said the second consecutive weekly increase in 30-year mortgage rates after they had been unchanged or fallen for a month reflected concerns in financial markets that inflation worries will keep the Fed from cutting rates in coming months.
"Stronger than expected consumer confidence and recent comments from members of the Fed raised some inflation concerns in the market, causing it to lower expectations of a Fed rate cut this year," said Frank Nothaft, Freddie Mac's chief economist.
Nothaft said he was looking for a gradual rise in mortgage rates over the remainder of the year, a development that he expects will further depress the beleaguered housing market.
Nothaft said he looked for housing to begin to stage a recovery toward the end of this year with a modest increase in both sales and home construction in 2008.
Freddie Mac reported that its survey found other type of mortgages showed increases this week.
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