MORTGAGE RATES REACH 10 MONTH HIGHS

LONG- AND SHORT-TERM MORTGAGE RATES REACH 10 MONTH HIGHS

Nationwide, 30-year fixed-rate mortgages averaged 6.53, for the week ending June 7th, up from last week's 6.42%.  The 30-year FRM has not been higher since the week ending August 10, 2006, when it averaged 6.55 percent.  The average for the 15-year FRM this week is 6.22%, up from last week’s 6.12%.  One-year “T”ARMs were up at 5.63% and five-year “T”ARMs averaged 6.20% up from last week’s 6.19%. 

"Mortgage rates climbed this week owing to market concerns of a tight labor force and wage growth. May's unemployment rate remained at the second lowest level since May 2001 while average hourly earnings rose," said Frank Nothaft, Freddie Mac vice president and chief economist. "Additionally, unit labor costs increased 1.8 percent over the first three months of the year, tripling the original estimate, and fueling inflation fears.

Meanwhile, Freddie Mac released a new purchase-transaction only version of its Conventional Mortgage Home Price Index this week which showed a sharp deceleration in house-price appreciation in the first quarter of 2007. As house prices grow less quickly and household incomes rise, the housing market will likely recover from its current slump, but perhaps not before the end of this year."

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