The 0.06% increase did not help the rates reach the levels of 2000, when the average was 8.62%. "Mortgage rates caught up to other interest rates this week amid signs that housing may be starting to cool down," says Robert Van Order, chief economist for Freddie Mac.
"Current job layoffs, coupled with lower consumer confidence, usually lead to fewer purchases of big ticket items, like a house," he adds. "Later in the second half of the year, however, we expect housing to pick back up. As a matter of fact, current forecasts continue to predict that 2001 could be a record year for originations and possibly home purchases."
The average for the 15-year FRM also rose slightly. It went from 6.67% in the week ending May 18 to 6.76%, with an average of 1 point, in the week ending May 25. It too is down from 2000, though, when it averaged 8.31%.
The figures that changed the least were the one-year treasury-indexed adjustable-rate mortgages. ARMs averaged 5.82% the week ending May 25, with an average 0.9 point. The week before they averaged 5.81%. It is still down significantly from last year when it averaged 7.25%.
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