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Mortgage rates bounce back on signs of a stronger economic recovery

(Source: The Washington Post, By Kathy Orton)

After a slight dip a week ago, mortgage rates have bounced back, according to the latest data released by Freddie Mac.
The 30-year fixed-rate average rebounded to near its two-year high, rising to 4.57 percent with an average 0.7 point. It was up from 4.51 percent a week ago, but down from 3.55 percent a year ago. The 30-year fixed rate reached its highest level since July 2011, 4.58 percent, two weeks ago. It has remained above 4.5 percent for three weeks.
The 15-year fixed-rate average also hovered near its two-year high, increasing to 3.59 percent with an average 0.7 point. It was 3.54 percent a week ago and 2.86 percent a year ago. The 15-year fixed rate hit its highest level since July 2011, 3.6 percent, two weeks ago. It has stayed above 3 percent since early June.
Hybrid adjustable rate mortgages increased as well. The five-year ARM rose to 3.28 percent with an average 0.5 point. It was 3.24 percent last week.
The one-year ARM jumped to 2.71 percent with an average 0.5 point. It was 2.64 percent a week ago.
Mortgage rates edged up this week on signs of a stronger economic recovery,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Real GDP was revised upwards to 2.5 percent growth in the second quarter of this year. In addition, residential construction spending rose for a ninth consecutive month in July. Lastly, the manufacturing industry expanded by the fastest pace in August since June 2011.”
Meanwhile, mortgage applications, which had been declining as interest rates rose, saw an uptick this week, according to the latest data from the Mortgage Bankers Association.
The Market Composite Index, a measure of total loan application volume, climbed 1.3 percent from the previous week. The Refinance Index increased 2 percent, while the Purchase Index was down 0.4 percent.
After sinking to its lowest level since April 2011, the refinance share of mortgage activity showed gains, rising to 61 percent of total applications, up from 60 percent a week ago. Refinances had accounted for more than 80 percent of applications earlier this year.

Source link: http://www.washingtonpost.com/blogs/where-we-live/wp/2013/09/05/mortgage-rates-bounce-back-on-signs-of-a-stronger-economic-recovery/

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