Rates come back down after spiking 75 basis points

Rates had been skyrocketing the past few weeks (rising about 75 basis points) but the bond market has been sending slightly better news to mortgage borrowers as investors in securities carved out of home loans have been accepting lower returns. Yields on Freddie Mac and Fannie Mae mortgage securities fell last week meaning the buyers are OK with lower rates on the loans backing the securities.

The typical rate on a fixed-rate 30-year loan rose to 5.59% last week, up from a record low of 4.78% in late April, according to Freddie Mac. Yields on Fannie Mae 30-year fixed-rate mortgage bonds dropped to 4.71%, down from 5.07% last Wednesday and the lowest since June 3. Rising rates have throttled the home refinancing spree that took hold last fall and continued through the winter. While rates under 6% are still great by historic standards, the recent increase also made it tougher to qualify for home purchases, and higher rates generally can put the brakes on the economy