Mortgage Rates At Highest Level Since 2002

NEWYou can now listen to Fox News articles!

Average interest rates on U.S. 30-year and 15-year fixed mortgages shot back up this week after ebbing slightly last week, according to a survey released by mortgage finance company Freddie Mac (FRE) on Thursday.

Rates on U.S. 30-year mortgages rose to an average of 6.80 percent from 6.74 percent last week, and 15-year mortgages climbed to an average 6.41 percent from 6.37 percent. Both were at their highest levels since the spring of 2002.

Click here to visit's Real Estate Center.

One-year adjustable rate mortgages were also up at 5.80 percent, compared to last week's 5.75 percent.

"Financial markets were a bit jittery after core Consumer Price Index (CPI) figures for June were released that indicated inflation might still be a potential threat," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

"If this were the case, the Fed would be more inclined to continue to raise rates this year. Mortgage rates reflected that thinking and rose accordingly," he added.

The Labor Department reported on Wednesday that the Consumer Price Index rose by 0.2 percent in June, in line with analysts' expectations. But core prices, which exclude what consumers have paid for food and energy, rose 0.3 percent that month, more than the 0.2 percent forecast.

Also on Wednesday, the Commerce Department said the pace of home-building slowed last month, by 5.3 percent, and applications to break ground in the future had fallen by 4.3 percent.

Lenders charged an average of 0.5 percent in fees and points on 30-year mortgages, down from 0.6 percent last week, and 0.4 percent on 15-year mortgages, the same as last week. They charged 0.7 percent in fees and points on the 1-year ARM, up from 0.6 percent last week.

The hybrid "5/1" ARM, set at a fixed rate for five years, then adjustable each year following, averaged 6.36 percent, well above the 6.33 percent of last week.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.

Click here to visit's Real Estate page.