The effective rate for commitments on fixed-rate mortgages (FRMs) rose 16 basis points to 10.86 percent in early December, while the rate for adjustable-rate mortgages (ARMs) rose 6 basis points to 9.32 percent, the Federal Home Loan Bank Board reports.

These increases generally correspond to increases in market interest rates during November."Mortgage rates have generally been rising since last spring, and are likely to keep rising for several more months," according to Bank Board chief economist James Barth. "Beyond the next few months, the course of rates will be heavily influenced by inflationary expectations and monetary policy," Barth added.

The effective rate on all mortgages closed rose 10 basis points to 9.57 percent in early December. It was the second consecutive month of double-digit increases, which has not occurred since late 1984. The increase was caused primarily by a 10-basis-point increase in the contract interest rate to 9.24 percent. Initial fees and charges declined 2 basis points to 1.96 percent.

The effective rate for FRMs closed rose 4 basis points to 10.58 percent, while the effective rate for ARMs closed increased 10 basis points to 8.86 percent. Responding to this narrowing, the proportion of ARMs to all loans closed dropped one percentage point to 59 percent, the second consecutive monthly decline.