Mortgage rates around the country rose for a second week in a row, with the 30-year fixed rate at 5.66 percent, Freddie Mac said in its weekly nationwide survey.
The increases came after rates had dipped to 5.53 percent in the last week of June, the lowest point for 30-year mortgages in 14 months. The 30-year rate was 5.62 percent last week.
Except for two weeks in late March, 30-year mortgages have been less than 6 percent all year. The low rates have powered a boom in sales of new and existing homes. There are worries that a housing bubble could be forming in hot sales areas with strong demand pushing home prices to levels that will not be sustainable.
Analysts attributed the rate increases of the past two weeks to financial markets moving to a view that the economy will expand at a stronger pace this year than previously believed.
"Over the past few weeks, financial markets have been gearing up for greater growth in the economy, which ultimately leads to higher inflation rates," said Frank Nothaft, Freddie Mac's chief economist.
Analysts continue to forecast that mortgage rates will rise at a gradual pace, matching moderate, quarter-point increases in short-term rates expected from the Federal Reserve.
Freddie Mac, in an updated economic forecast released last week, predicted that house price increases, 11 percent last year, will moderate slightly to 7.9 percent this year and 6.8 percent next year.
Rates on 15-year fixed-rate mortgages, often used for refinancing a home mortgage, averaged 5.25 percent this week, up from 5.20 percent last week.
For one-year adjustable-rate mortgages, rates averaged 4.39 percent, down from 4.33 percent last week. Rates on five-year hybrid adjustable-rate mortgages averaged 5.15 percent, down from 5.19 percent last week.
The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year mortgages and 15-year mortgages both carried an average fee of 0.6 point this week. The other two categories carried average fees of 0.7 point.
A year ago, 30-year mortgages averaged 6 percent, 15-year mortgages were at 5.40 percent and one-year ARMs averaged 4.02 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.
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