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Posted at 10:00 AM ET, 08/02/2012

Mortgage rates reverse their trend, rising slightly after weeks of record lows

Mortgage rates edged up this week, breaking their streak of record lows, according to the latest data released Thursday by Freddie Mac.

After falling below 3.5 percent for the first time ever last week, the 30-year fixed-rate average climbed to 3.55 percent, up from 3.49 percent a week ago. It was 4.39 percent a year ago.

The 15-year fixed-rate average also increased, rising to 2.83 percent from 2.80 percent last week but down from 3.54 percent a year ago. Still, the 15-year average has lingered below 3 percent for 10 consecutive weeks.

The hybrid adjustable-rate mortgages also remained below 3 percent again this week. The one-year ARM was down from last week, falling to 2.70 percent from 2.71 percent a week ago. A year ago, it was 3.02 percent.

The five-year ARM rose again for the second week in a row to 2.75 percent, up from 2.74 percent a week ago and down from 3.18 percent a year ago.

Frank Nothaft, Freddie Mac vice president and chief economist, pointed to mixed economic data at home and abroad as why the rate was up slightly after matching or falling to record lows in 13 of the past 14 weeks.

“Recent announcements of additional debt relief for the Eurozone and mixed domestic economic indicators added upward pressure on Treasury yields as well as mortgage rates this week,” Nothaft said in a statement. “The U.S. economy grew at a 1.5 percent annualized rate in the second quarter, slower than the 2.0 percent growth in the first quarter with consumer spending in June unchanged from May. However, consumer confidence rose in July for the first time in five months according to the Conference Board.

“Housing data were also assorted. The S&P-500 Case Shiller 20-City Composite Index rose for the fourth consecutive month in May with 18 of the cities experiencing positive growth. Nonetheless, pending home sales fell 1.4 percent in June, below the market consensus forecast of a 0.3 percent increase, and May’s figure had a downward revision.”

The Mortgage Bankers Association reported Wednesday that mortgage applications increased slightly as the decrease in purchase applications was offset by the continued surge in refinance applications.

The Market Composite Index, which measures loan application volume, went up 0.2 percent. The Purchase Index decreased 2 percent from the previous week, while the Refinance Index increased 0.8 percent from the previous week.

The refinance share accounts for 81 percent of total applications, reaching its highest level since the week ending Jan. 20.

By  |  10:00 AM ET, 08/02/2012

 
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