"Mortgage rates moved sharply upward this week, with rates on 30-year fixed-rate mortgages jumping more than 20 basis points, the largest upward movement in over three years," said Frank Nothaft, Freddie Mac vice president and chief economist. "These moves parallel rising yields on Treasury securities, as concerns about inflation pressures and continuing strength of consumer and business spending have dimmed hopes for an interest rate cut."

"Higher mortgage rates may weigh on the housing market's gradual recovery. While demand appears to have stabilized, inventories of new homes remain high, putting downward pressure on

Freddie Mac's Primary Mortgage Market Survey® (PMMS®)concluded there was a double digit jump in the rates of each of the four products the survey tracks particularly the following:

* 30 year Fixed Rate
* 15 Year Fixed Rate
* 5 Year Adjustable Rate
* 1 year adjustable Rate

The 30-year fixed-rate mortgage (FRM) had an average contract interest rate of 6.74 percent. This is the highest the 30-year FRM has been since July 20, 2006 when it averaged 6.80 percent. Based on the previous week, this is an increase of 21 basis points.

The 15-year FRM averaged 6.43 percent with 0.4 point compared to the previous week when it averaged 6.22 percent with 0.4 point. The last time the 15-year rate was higher was also July 20 when it averaged 6.44 percent.

Adjustable rate mortgages (ARMs) were up a little less noticeable than the fixed-rate products. The five-year Treasury-indexed hybrid ARM averaged 6.37 percent, an increase of 13 basis points from the week ended June 7. Fees decreased from 0.6 to 0.5. This is the highest rate for the 5/1 since July 6 when it averaged 6.39 percent.

The one-year Treasury-indexed ARM averaged 5.75 percent compared to the previous week when it averaged 5.65 percent. Fees were unchanged at 0.7 point. During the week ended July 27, the rate averaged 5.78 percent.

reference: FreddieMac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com