U.S. Fixed-Rate Mortgages Edging Up

The average U.S. 30-year fixed-rate mortgage rose in the last seven days to 6.37 percent, mortgage lender Freddie Mac said Thursday.

The 30-year has not been this high since Sept. 5, 2003, when it was 6.44 percent. The previous seven-day period’s average was 6.24 percent, and last year at this time the 30-year fixed rate mortgage was an average of 5.85 percent.

Stronger than expected gains in the manufacturing and service industries — coupled with higher labor costs — ignited inflation concerns, which led to the rise in mortgage rates this week, said Frank Nothaft, Freddie Mac vice president and chief economist.

Financial markets are beginning to think that the Fed will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates. Although the signs are mixed, the housing industry is now beginning to shift into slower gear, and higher mortgage rates will only strengthen that change. However, we see no signs of a bursting bubble, but rather a return to a more normal pace of activity.