Freddie Mac, Bankrate find mortgage rates skyrocketing

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates shot up to their highest point since April, supported by strong economic news and a sharp decline in the unemployment rate.

Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed rate mortgage at 5.05 percent with 0.7 point, up from 4.81 percent a week ago.

Bankrate’s national mortgage survey put the 30-year mortgage at 5.23 percent with 0.45 point, up from 5.02 percent a week ago.

"Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week,” Freddie Mac Chief Economist Frank Nothaft said. "For all of 2010, nonfarm productivity rose 3.6 percent, the most since 2002, while January’s unemployment rate unexpectedly fell from 9.4 percent to 9.0 percent. Moreover, the service industry expanded in January at the fastest pace since August 2005.

"As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010."

Added Bankrate:  Investors moved out of safe haven Treasury notes and into riskier assets such as stocks that have better return prospects in a growing economy. Mortgage rates are closely related to yields on long-term government bonds.

Also from the surveys, Freddie Mac said the 15-year fixed rate mortgage moved up to 4.29 percent with 0.7 point, up from 4.08 percent a week ago. Bankrate put the 15 year at 4.48 percent, upt from 4.29 percent.