WASHINGTON (AP) â€” Mortgages rates shot up this week with 30-year and 15-year mortgages reaching their highest levels since 1995.
The average interest rate on 30-year fixed-rate mortgages climbed to 8.52 percent for the week ending May 12 from 8.28 percent the previous week, according to a survey released Thursday by Freddie Mac, the mortgage company. This time a year ago, 30-year mortgages averaged 7.10 percent.
This week's 8.52 percent rate was the highest since March 10, 1995, when the 30-year rate averaged 8.62 percent.
Fifteen-year mortgages, a popular option for refinancing, also rose this week to 8.17 percent, up from 7.94 percent. This time a year ago, 15-year mortgages were at 6.71 percent.
The 8.17 percent rate also was the highest since March 10, 1995, when 15-year mortgage rate averaged 8.24 percent.
On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 6.96 percent this week, up from 6.90 percent last week.
The rates do not include add-on fees known as points, which averaged at or just over 1 percent of the loan amount for all three types of mortgages.
``Long-term interest rates jumped this week in anticipation of the Fed's actions next week,'' said Freddie Mac's chief economist Robert Van Order. ``News that inflation finally reared its ugly head has increased the perception that the Fed will raise rates by 50 basis points (a half percentage point) instead of the 25 that had been previously expected.''
The Federal Reserve, which has boosted interest rates five times by a quarter-point each since June 30, meets Tuesday and economists widely expect rates to be pushed higher again.