Mortgage Rates Rise Significantly For Week

Fixed-rate, 30-year mortgages rose to their highest level in more than two and a half years, with the one- and five-year rates also posting slight gains, Freddie Mac said. The average rate on a 30-year fixed-rate mortgage (considered the industry’s benchmark) rose to 6.37 percent for the week ending March 9, up from 6.24 percent the previous week.

One year ago, with the nation’s housing boom in full swing, the 30-year mortgage averaged 5.85 percent. The 30-year average has not reached a level this high since September 5, 2003, when it hit 6.44 percent. The primary culprit? Fears that the Federal Reserve will continue its systematic interest rate hikes beginning later this month and continuing throughout the year.

“Stronger than expected gains in the manufacturing and service industries — coupled with higher labor costs — ignited inflation concerns, which led to the rise in mortgage rates this week,” Frank Nothaft, Freddie Mac V.P. and chief economist, said in a statement. “Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates.”

The average rate on 15-year fixed-rate mortgages was an even 6 percent, up from 5.89 percent a week ago and 5.38 percent last year at this time. Meanwhile, five-year adjustable-rate mortgages (ARMs) finished at 6.03 percent, up slightly from the national average of 5.97 percent posted the previous week. The five-year ARM averaged 5.22 percent last year.

One-year adjustable-rate mortgages averaged 5.45 percent, up from 5.34 percent from the week before. At this time a year ago, the one-year loan averaged just 4.24 percent.

A change this significant — 0.13 percent in just one week — would change the complexion of the Florida housing market if posted regularly. Although the signs are mixed, the housing industry is already slowly, with median prices leveling off in Miami-Dade and Broward counties. Still, Florida home loans are comparatively low by historical standards, so don’t expect the bubble to burst all of a sudden. Just keep an eye on things. The time may be right for a buy.