Mortgages inch upward as credit markets calm

NORTH PALM BEACH — Fixed mortgage rates inched upward for the third week in a row, with the average conforming 30-year fixed mortgage rate rising  5 basis points to to 6.16 percent, according to Bankrate.com's weekly national survey of large lenders.

The average 15-year fixed rate mortgages now 5.71 percent, while the average jumbo 30-year fixed rate nosed up to 7.35 percent. Adjustable mortgage rates moved upward as well, with the average 5/1 ARM rising to 5.96 percent while the average 1-year ARM soared to 6.96 percent.

The turmoil that was so prevalent in credit markets earlier in the year has given way to smoother waters in recent weeks. Accordingly, fixed mortgage rates have been comparatively placid in contrast to the wild gyrations seen during the first quarter.

Mortgage rates are closely related to yields on long-term government bonds. Short of a crisis in the credit markets, the Federal Reserve is expected to hold off from further interest rate cuts after this week’s move.

But mortgage rates still could be volatile in the weeks ahead. Additional signs of economic weakness would likely pull mortgage rates down. Inflation is a risk as well, and could propel rates higher in the weeks ahead.

The average 30-year fixed mortgage rate was as low as 5.57 percent in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. In February, the average 30-year fixed rate got as high as 6.41 percent, which meant the same $200,000 loan would have carried a monthly payment of $1,252.32.

With the average rate at 6.16 percent, a $200,000 loan would mean a monthly payment of $1,219.75.

Survey results:

— 30-year fixed: 6.16 percent, up from 6.11 percent last week (avg. points: 0.36).

— 15-year fixed: 5.71 percent, up from 5.70 percent last week (avg. points: 0.39).

— 5/1 ARM: 5.96 percent, up from 5.92 percent last week (avg. points: 0.44).

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

Meanwhile, the Rate Trend Index indicates higher rates in the weeks ahead. A majority of the index’s panelists, 56 percent, thinks rates are headed higher. The remaining 44 percent are evenly split between forecasting a decline and expecting rates to remain more or less unchanged in the coming 30 to 45 days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI