Mortgage Rates Rise from Recent Lows

Rates rose thisrnweek for all mortgage types tracked by Freddie Mac through its Primary MortgagernMarket Survey.

The 30-yearrnfixed-rate mortgage averaged 4.92 percent with 0.7 point for the week endedrnOctober 15.  A week earlier the averagernwas 4.87 percent also with 0.7 point.

The 15-year FRMrnhad an average contract interest rate of 4.37 percent compared with thernall-time record low of 4.33 percent reached the previous week.   Feesrnand points were unchanged at 0.7 point.

The five-yearrnTreasury-indexed hybrid adjustable rate mortgage (ARM) increased from 4.35rnpercent to 4.38 percent.  Fees and pointsrnalso rose from 0.5 point to 0.6 point.

The one-year ARMrnincreased 7 basis points to 4.60 percent. rnFees and points remained stable at 0.5 point.

According tornFrank Nothaft, Freddie Mac vice president and chief economist, “Mortgage ratesrnrose slightly over the week, but rates on 30-year fixed mortgages remainedrnbelow 5 percent for the third consecutive week. rnHomeowners are taking advantage of these low rates to refinance theirrncurrent balances.  Over the past fivernweeks ending October 9, more than 3 out of 5 mortgage applications were forrnrefinancing, according to the Mortgage Bankers Association.

The outlook onrneconomic growth in the second half of this year has improved over the past fewrnmonths.  At its September 22-23 monetaryrnpolicy meetings, the Federal Reserve increased its forecast for real GDP growthrnfrom the last meeting in mid-August. rnThey noted that data from the housing sector indicated that a gradualrnrecovery in activity was under way.  Thernmodest strengthening came about, in part, (due) to improvements in housingrnaffordability stemming from low interest rates for conforming loans and a lowerrnlevel of house prices.

Mortgage interest rates as reported by Fannie Mae were mixed.

The 30-year FRM during the week ended October 9 had an average yield ofrn4.54 percent, down from an average of 4.70 percent a week earlier.  15-year FRMs were also down from 4.07 percentrnto 4.01 percent.

Government guaranteed FHA/VA 30-year FRMs, however, rose from 5.28rnpercent to 5.52 percent and one year ARMs were up slightly to 2.94 percent fromrn2.91 percent.

All Fannie Mae yields are quoted net of servicing fees.

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