Freddie Mac: Seesawing Mortgage Rates Inched Up Again

After two consecutive weeks of modest decline, mortgage rates inched up slightly during the past week; however, government-sponsored enterprise Freddie Mac points out that rates are still historically low compared to pre-crisis levels.

According to Freddie Mac's Primary Mortgage Market Survey for the week ending Aug. 1, the average rate for 30-year fixed-rate mortgage (FRM) was 4.39%, up about 0.7 percentage points compared to the week prior, when it averaged 4.31%.

Last year at this time, the 30-year FRM averaged 3.55%.

The average rate for a 15-year fixed-rate mortgage increased to 3.43%, an increase of 0.7 basis points compared to last week, when it averaged 3.39%.

A year ago at this time, the 15-year fixed-rate mortgage averaged 2.83%.

The average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) increased to 3.18%, a boost of 0.6 basis points from last week's 3.16%.

A year ago, the five-year ARM averaged 2.75%.

The average rate for one-year Treasury-indexed ARMs was 2.64% this week, a drop of 0.4 basis points compared to last week, when they averaged 2.65%.

At this time last year, the one-year ARM averaged 2.70%

‘Mortgage rates rose slightly leading up to the Federal Reserve's monetary policy statement this week,’ says Frank Nothaft, vice president and chief economist, Freddie Mac, in a release. ‘The statement indicated no change in monetary policy. The Fed indicated that the economy expanded at a modest pace, but the unemployment rate remains elevated.

‘With mortgage rates still relatively low, the housing recovery continues to support the overall economy,’ Nothaft adds. ‘May's S&P/Case Shiller 20-city composite index was up 12.2 percent from last May and represented the largest annual increase since March 2006. In addition, pending home sales in June hovered near a six-and-a-half year high. Finally, second-quarter GDP growth came in at 1.7 percent with residential fixed investment contributing 0.4 percent. This makes it the 11th consecutive quarter that housing has made a positive contribution to real GDP growth.’


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