Freddie Mac: Mortgage Rates Rise from Recent Lows

Rates rose this week for all mortgage types tracked by Freddie Mac through its Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage averaged 4.92 percent with 0.7 point for the week ended October 15.  A week earlier the average was 4.87 percent also with 0.7 point.

The 15-year FRM had an average contract interest rate of 4.37 percent compared with the all-time record low of 4.33 percent reached the previous week.   Fees and points were unchanged at 0.7 point.

The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) increased from 4.35 percent to 4.38 percent.  Fees and points also rose from 0.5 point to 0.6 point.

The one-year ARM increased 7 basis points to 4.60 percent.  Fees and points remained stable at 0.5 point.

According to Frank Nothaft, Freddie Mac vice president and chief economist, "Mortgage rates rose slightly over the week, but rates on 30-year fixed mortgages remained below 5 percent for the third consecutive week.  Homeowners are taking advantage of these low rates to refinance their current balances.  Over the past five weeks ending October 9, more than 3 out of 5 mortgage applications were for refinancing, according to the Mortgage Bankers Association.

The outlook on economic growth in the second half of this year has improved over the past few months.  At its September 22-23 monetary policy meetings, the Federal Reserve increased its forecast for real GDP growth from the last meeting in mid-August.  They noted that data from the housing sector indicated that a gradual recovery in activity was under way.  The modest strengthening came about, in part, (due) to improvements in housing affordability stemming from low interest rates for conforming loans and a lower level 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 of 4.54 percent, down from an average of 4.70 percent a week earlier.  15-year FRMs were also down from 4.07 percent to 4.01 percent.

Government guaranteed FHA/VA 30-year FRMs, however, rose from 5.28 percent to 5.52 percent and one year ARMs were up slightly to 2.94 percent from 2.91 percent.

All Fannie Mae yields are quoted net of servicing fees.