Concerns over inflation are driving mortgage rates higher for the third straight week. The interest rate paid for a 30 year mortgage was 5.91% this week, up from 5.8% last week. Last fall the rate was 5.72%. The average interest rate for a 15 year fixed interest rate mortgage was 5.48%, up from 5.37% the week before and 5.13% last fall. Five year Treasury indexed adjustable rate mortgages (ARMs), were 5.44%, up from 5.31% last week. One year Treasury indexed ARMs are up 4.68%, from 4.48% last week. At this time last fall, the one year ARM was 3.97%.
Economic conditions are currently a mixed bag for mortgage interest rates. This week the jump in mortgage interest rates reflects market anxiety over inflation, energy price increases, and lack of consumer confidence. All together, these changes hint of decreased personal spending until the end of the year which should drive mortgage interest rates even higher.
The Federal Reserve has vowed to keep its war on inflation going. To do this, it will raise interest rates in up coming meetings. Although Fed changes affect shorter term Treasury yields, the outcome of these meetings seems to sway long term mortgage interest rates.