2014 Starts Off With Rising Mortgage Rates
Freddie Mac released its weekly update on national mortgage rates -- the first of the new year -- this morning. And just as at the end of 2013, interest rates are on the rise. Although the average U.S. rates for fixed mortgages edged higher this week for the third straight week, they remained low by historical standards.
Rates for 30-year fixed-rate mortgages (FRMs) rose five basis points to 4.53%, while 15-year FRMs tacked on three b.p. to reach 3.55%. A year ago, 30-year FRMs averaged 3.34% and 15-year FRMs averaged 2.64%.
Among adjustable-rate mortgages (ARMs), 5/1 ARMs gained five basis points over the past week to rise to 3.05%. Shorter one-year ARMs held steady at 2.56%. A year ago these numbers averaged 2.71% for the 5/1 ARM and 2.57% for the one-year AR.
In 2013, mortgage rates peaked in August at 4.6% amid expectations the Federal Reserve would reduce its $85 billion a month in bond purchases. Last month the Fed deemed the economy strong enough for it to reduce the monthly purchases by $10 billion.
Freddie Mac Vice President and Chief Economist Frank Nothaft took an optimistic tone in talking about the numbers, saying in a statement that rates continue to rise in response to "signs of a stronger economic recovery." Pending home sales turned a corner in November, breaking a five-month-long streak of declines to rise 0.2%, Nothaft noted, while consumer confidence rose in December. And according to the latest S&P/Case-Shiller index of housing prices, home values are back at levels last seen in late 2005 and up 13.6% from October 2012.
-- Material from The Associated Press was used in this report.
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