Mortgage Rates Move Up
Freddie Mac released its weekly update on national mortgage rates Thursday morning, and rates are once again climbing across the aboard.
Thirty-year fixed rate mortgages (FRM) rose six basis points to hit 4.57%, close to the high this year of 4.58% reached Aug. 22. Fifteen-year FRMs gained five b.p. to land at 3.59%, near the year's high of 3.6%.
Long-term mortgage rates have risen more than a full percentage point since May, when Chairman Ben Bernanke first signaled that the Federal Reserve could reduce its bond purchases later this year if the economy continued to strengthen. The bond purchases have been intended to keep long-term loan rates ultra-low.
Adjustable rate mortgages (ARMs) also marched up over the most recent week. 5/1 ARMs tacked on four basis points to reach 3.28%; one-year ARMs spiked seven b.p. to hit 2.71%.
Mortgage rates remain low by historical standards and the most recent week-to-week increases follow a week that saw mostly decreases.
Commenting on the numbers, Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the across-the-board rate increases to "signs of a stronger economic recovery." Nothaft pointed out that the nation's "real GDP" growth rate for Q2 was just revised upward to 2.5%. Plus, "residential construction spending rose for a ninth consecutive month in July." That suggests that consumers appear able to pay more for houses and thus banks charge them more for loans to buy those houses.
-- Material from The Associated Press was used in this report.
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