Mortgage rates increased during the week ended May 28 according to the results of Freddie Mac's Primary Mortgage Market Survey.

The average rate for the 30-year fixed-rate mortgage (FRM) jumped from 4.82 percent with 0.7 point during the week ended May 21 to 4.91 percent with 0.7 point this week.  This is the highest average for this product since the week ended March 19 when it was at 4.98 percent.

The 15-yer FRM was up slightly to 4.53 percent with 0.7 point from 4.50 percent also with 0.7 point.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.82 percent this week, with an average 0.6 point, up from last week when they averaged 4.79 percent with 0.6 point.

The one-year Treasury-indexed ARM, however, took a fairly steep dive, dropping to 4.69 percent from 4.82 percent.  Fees and points were unchanged at 0.6 point.  This is the lowest average for the one-year ARM since the week ending September 29, 2005, when it averaged 4.68 percent.

Frank Nothaft, Freddie Mac vice president and chief economist said in a statement released with the survey data, "Fixed-rate mortgage rates followed long-term bond yields higher this week as financial markets try to discern the state of the economy.  Consumer confidence rose again in May and represented the largest two-month rally since records began in 1967.  According to the National Association for Business Economics, the consensus of a recent survey of 45 professional forecasters called for the recession to end in the second half of this year, but the recovery is to be more moderate than the previous survey.

"Housing continues to be a drag on the economy, however.  Although single-family existing home sales rose 2.5 percent in April, inventories of homes for sale also rose to 9.6 months from 9.0 in March, according to the National Association of Realtors® (NAR).  Moreover, the NAR noted that sales of distressed homes made up 45 percent of the purchases in April.  Such types of sales mixed with a large supply of unsold homes keep depressing house prices.  For example, a new research report from the Federal Housing Finance Agency found that sales of distressed homes accelerated the measured decline in California's home values by 5.3% from the peak in 2006 through the first quarter of 2009."

On Tuesday Fannie Mae released figures on its mortgage yields for the week ended May 26.

The 30-year FRM increased from 4.34 percent a week earlier to 4.49 percent.  Yields on the 15-year FRM were 4.04 percent compared to 4.02 percent the previous week. 

Government guaranteed FHA and VA mortgages with a 30-year fixed rate averaged 5.34.  A week earlier the average was 5.14.

The yield for the one-year ARM was 3.42, up from 3.16 during the week ended May 19.  Perhaps because of almost non-existent demand, the current yield is higher than the 3.38 reported one year ago.

All Fannie Mae yields are quoted on a net basis, exclusive of servicing fees.