Fixed mortgage rates surged in Freddie Mac"s latest survey. The 30-year fixed mortgage rate jumped 52 basis points to 6.46%, which is its highest level since mid-August when it averaged 6.47%. 15-year fixed rates were up nearly as much at 51 basis points to 6.14%. They 5-year hybrid ARM also recorded a significant increase at 24 basis points to 6.14%. Only the one-year ARM was little changed at 5.16% compared to 5.15% last week. Freddie"s chief economist, Frank Nothaft, noted ARMs "showed smaller gains in part due to the Federal Reserve"s October 8 inter-meeting cut in the overnight lending rate."
This should slow mortgage application activity this week. Yesterday, the Mortgage Bankers Association reported a 12.5% gain in the Refi Index to 1514 for the week ending October 10 as mortgage rates declined 16 basis points to 5.94%, according to Freddie Mac"s survey.