Mortgage Rates Increase

Mortgage Rates Leap to 3-Month High PR Newswire

April 08, 2004

NEW YORK, Apr 8, 2004 /PRNewswire-FirstCall via COMTEX/ -- Mortgage rates jumped sharply this week, reaching a three-month high. The average 30-year fixed rate mortgage increased from 5.6 percent to 5.8 percent, according to Bankrate.com's weekly national survey of large lenders. The mortgages in this week's survey had an average of 0.37 discount and origination points. Mortgage rates are now the highest since the week of Jan. 7, 2004.

The 15-year fixed rate mortgage popular for refinancing climbed by one- quarter percent, from 4.89 percent to 5.14 percent. The jumbo 30-year fixed rate mortgage surged 21 basis points to 6 percent and the one-year adjustable rate mortgage increased by a more modest 12 basis points to 3.66 percent. A basis point is one one-hundredth of one percentage point.

The catalyst for this week's move in mortgage rates was the release of the March employment report, showing nonfarm payrolls grew by an estimated 308,000 jobs. One month ago when a disappointing report for February was issued, the average 30-year fixed rate mortgage fell 20 basis points, from 5.64 percent to 5.44 percent. This month, mortgage rates responded in a similar fashion -- albeit in the opposite direction. The average mortgage rate climbed from 5.6 percent to 5.8 percent as bond investors unloaded long-term government bonds. Mortgage rates are closely related to yields on long-term government bonds.

Mortgage rates have increased notably in the past three weeks, and so too have monthly mortgage payments. With the average 30-year fixed rate mortgage now 5.8 percent, the monthly payment for a $165,000 30-year fixed rate mortgage is $968.14. Three weeks ago, when the average rate was 5.41 percent, the monthly payment on the same loan was $927.56. The $40.58 difference in monthly payments amounts to more than $14,600 over the loan term.

For additional information contact Anthony Pipitone at 312-492-3239.