Featured Condo
Featured Community
  • Local Rates
  • National Rates
Data Provided by Interest.com
Where We Live
Mail E-mail |  On Twitter Follow |  On Facebook Fan |  RSS RSS Feed
Posted at 10:00 AM ET, 01/31/2013

Mortgage rates show an increase for the second week in a row

After months of hovering near historic lows, mortgage rates appear to be ascending.

According to the latest data released by Freddie Mac, the 30-year fixed-rate average climbed to 3.53 percent with an average 0.7 point for the week. It was up from 3.42 percent a week ago, but down from 3.87 percent a year ago. It marked the first time since Sept. 13 that the 30-year fixed rate moved above 3.5 percent.

The 15-year fixed-rate average rose to 2.81 percent with an average 0.7 point. It was up from 2.71 percent a week ago, but down from 3.14 percent a year ago. Still, the 15-year fixed rate has remained below 3 percent since May 24.

Hybrid adjustable-rate mortgages also showed increases. The five-year ARM edged up to 2.70 percent with an average 0.6 point. It was 2.67 percent a week ago. The one-year ARM crept up to 2.59 percent with an average 0.5 point. It was 2.57 percent a week ago.

Despite a recent report that the American economy shrank at the end of last year for the first time since the recession ended, economists cited the improving housing sector as a reason for a surge in the mortgage rates.

“Mortgage rates continued to trend upwards this week amid a growing economy led in part by the recovering housing market,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “For instance, new home sales totaled 367,000 in 2012, the most in three years and reflected the first annual increase in seven years. Pending home sales in 2012 averaged its highest reading since 2006. And the Standard & Poor’s/Case-Shiller 20-city composite house price index rose 5.5 percent over the 12-months ending in November 2012, the largest annual growth since August 2006. All of these factors helped residential fixed investment to add nearly 0.4 percentage points to real GDP growth in the fourth quarter alone.”

Not surprisingly as mortgage rates increased, mortgage applications showed their first decline of the year, according to the Mortgage Bankers Association.

The Market Composite Index, a measure of loan application volume, dropped 8.1 percent from the previous week. The Refinance Index fell 10 percent, while the Purchase Index went down 2 percent.

For the first time since August, the refinance share of mortgage activity fell below 80 percent. It accounted for 79 percent of total applications.

By  |  10:00 AM ET, 01/31/2013

 
Read what others are saying
     

    © 2011 The Washington Post Company