6.36% and 0.5 points - 30-year fixed-rate mortgage, average in Western U.S. for week ending October 10, 2006. Blue line is Freddie Mac forecast made 10/10/2006.
“Renewed concern that inflation is still an issue put some upward pressure on bond yields, which generally translates into higher interest and mortgage rates,” said Frank Nothaft, Freddie Mac vice president and chief economist. “ARM rates especially felt the weight of increased inflation fears, narrowing the gap between ARMs and fixed-rate mortgage rates. Thus, ARMs may become less desirable.”
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