Mortgage interest rates rose this week to their highest levels since the summer of 2002. According to a survey of national mortgage lenders the average interest rate on a 30 year, fixed rate mortgage crept up to 6.49% this week. Last week this 30 year mortgage fixed interest rate averaged 6.43%.
Mortgage analysts believe interest rates are up this week due to inflationary concerns following favorable employment data released by the government last week. Higher inflation, coupled with higher energy costs, results in higher mortgage interest rates.
Recent interest rate hikes come as bad news to nearly 1/3 of American homeowners that financed their homes using Adjustable Rate Mortgages. These homeowners will see their payments go up significantly once the loans start adjusting their monthly payments to the current interest rates.
Some analysts predict mortgage interest rates could hit 7% by the end of the year. As a result, home sales are expected to decline. Home sales have been at record highs as a result of historically low mortgage interest rates.
Interest rates for 15 year fixed rate mortgages average 6.14% this week. This 15 year fixed rate loan is up from 6.10% the week before.
One year adjustable rate mortgages averaged 5.61% this week. This is up from 5.57% last week. Five year hybrid Adjustable Rate Mortgages are up to 6.13% this week from 6.11% the previous week.