Friday, May 12, 2006

Markets await next week's inflation reports

Markets await next week's inflation reportsThursday, May 11, 2006Inman NewsFrank Nothaft Frank Nothaft, Freddie MacMortgage rates posted mixed results this week in surveys conducted by Freddie Mac and Bankrate.com, remaining mostly unchanged from the week before, the companies announced today.In Freddie Mac's survey, the 30-year fixed-rate mortgage averaged 6.58 percent for the week ended today, down from last week's average of 6.59 percent. The average for the 15-year fixed-rate mortgage is 6.17 percent, down from last week's average of 6.22 percent. Points on both the 30- and 15-year averaged 0.5.The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.22 percent this week, with an average 0.5 point, up from last week when it averaged 6.21 percent. The one-year Treasury-indexed ARM averaged 5.62 percent, with an average 0.7 point, down from last week when it averaged 5.67 percent."Less-than-expected job growth in April helped mortgage rates to level off this week. Even ARM rates were little affected by the Federal Reserve's increase in the federal funds rate," said Frank Nothaft, Freddie Mac vice president and chief economist. "However, next week's release of the April Consumer and Producer Price Indexes may lift mortgage rates higher if the figures show an acceleration in inflation."In Bankrate.com's survey, fixed mortgage rates were unchanged in the past week, with the average 30-year fixed rate mortgage remaining at 6.67 percent. This is still the highest since the week of June 12, 2002. The 30-year fixed rate mortgages in this week's survey had an average of 0.35 discount and origination points.The average 15-year fixed-rate mortgage popular for refinancing inched higher to 6.3 percent, Bankrate.com reported. On larger loans, the average jumbo 30-year fixed rate increased to 6.86 percent. Adjustable-rate mortgages climbed again this week, with the average 5/1 ARM rising to 6.35 percent, and the average one-year ARM gaining to 5.92 percent.While a 16th interest-rate hike was a foregone conclusion, mortgage rates hovered on the uncertainty of whether the Federal Open Market Committee would indicate a likely pause at its next meeting in June, or an intent to continue raising interest rates, according to Bankrate.com. The post-meeting statement issued by the Fed was noncommittal, with the Fed leaving its options open. The Fed said that further interest-rate hikes "may yet be needed to address inflation risks" but also mentioned how dependent their course will be on incoming economic data. Long-term bond yields were little changed in the week leading up to the FOMC meeting, and in the hours following the Fed's announcement. Mortgage rates are closely related to yields on long-term government bonds.The following is a sampling of Bankrate.com's average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:New York - 6.63 percent with 0.23 pointLos Angeles - 6.74 percent with 0.44 pointChicago - 6.77 percent with 0.06 pointSan Francisco - 6.75 percent with 0.27 pointPhiladelphia - 6.58 percent with 0.43 pointDetroit - 6.73 percent with 0.01 pointBoston - 6.61 percent with 0.26 pointHouston - 6.66 percent with 0.56 pointDallas - 6.68 percent with 0.48 pointWashington, D.C. - 6.55 percent with 0.76 point

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