By Kevin Chiu
Economic volatility and banking concerns over mortgage lending led to a sudden jump in mortgage rates as fixed rate loans moved especially 
higher for the week. The jump in rates may also be attributed to increasing Treasury bond yields, which bottomed out under just 2% last week.
Adjustable rate mortgages also experienced a slim decline, with the 5-year Treasury indexed hybrid mortgage averaging 3.07% this week, down from 3.08 a week ago. The 30-year fixed rate mortgage averaged 4.22% with an average of 0.7 point, up from 4.15% last week when it hit a new all-time record low.
Financial analysts are uncertain whether interest rates will dip lower again as the U.S. economy struggles to find a footing, and the housing market suffers record foreclosures with falling home prices in most regions. A bloated inventory of homes and other residential properties that have not yet been counted as foreclosures are expected to further pressure home prices in coming months as millions of vacant properties hit the marketplace.
Lower rates this week failed to produce an increase in home refinancing as homeowners, uncertain over the nation’s economic future with growing worries over their own employment decided to keep their present interest rates rather than apply for lower rates with a refinance.
The 1-year ARM averaged 2.93% for the week with an average 0.5 point, up from 2.86% a week ago. All rates, however, are much lower than a year ago when the federal tax credit for home buyers was winding down.
Despite only a small percentage of housing markets that show any sort of improvement nationally in data gathered by private housing analysts, the newly introduced Federal Housing Finance Agency national House Price Index showed a rise for the third straight month in June. The index was developed by the Obama administration as a political tool to show homeowners how the government feels the housing market is doing in comparison to the greater economy.
“Fixed mortgage rates followed Treasury bond yields higher this week while data reports suggest an improvement in the housing market,” said Freddie Mac chief economist Frank Nothaft.
The Mortgage Bankers Association says that the rate of serious delinquencies, 90 days or later fell for the sixth month in a row, but that homeowners with mortgages falling behind on their payments are increasing.