According to a weekly report from Freddie Mac, the rates on 30-year fixed mortgages went up, breaking a spell of record lows that has lasted for 13 weeks.
Mortgage rates tick up slightly
Freddie Mac, Uncle Sam’s mortgage buyer, reported Thursday that the average rate for a 30-year fixed mortgage rose from last week’s 3.49 percent to 3.55 percent. The 15-year fixed mortgage, which is commonly used for refis, also climbed from 2.80 percent to 2.83 percent.
The increase comes following news of increased consumer confidence domestically, as well as news of efforts to relieve debts in the Eurozone. Frank Nothaft, Freddie Mac’s top economist, said:
“Recent announcements of additional debt relief for the Eurozone and mixed domestic economic indicators added upward pressure on Treasury yields, as well as mortgage rates this week.”
United States Treasury securities generally tend to track with mortgage rates.
Home price rising, but still low
Housing news has been uneven of late, but earlier this week the S&P/Shiller-Case index reported that the price of single-family dwellings rose for the fourth straight month in May, pointing to more stability in the housing market.
Still, home prices remain quite low. A year ago at this time the rate on a 30-year fixed mortgage averaged 4.39 percent. And the average rate on a 15-year fixed mortgage a year ago was 3.54 percent.
Although the rates have risen somewhat, we can expect them to remain relatively low for the foreseeable future. Greg McBride, an analyst with bankrate.com, wrote of the rate increase:
“[It] is more likely to be a temporary retreat than a lasting turn. Mortgage rates will stay very low given the ongoing uncertainties surrounding the economy, fiscal cliff, and European debt circus.”
The fiscal cliff refers to tax increases and spending cuts that are scheduled to kick in at the end of the year unless Congress acts to change it. Some say the “cliff” could put the nation into a second recession, making many cautious in their business dealings.
Freddie Mac weekly data
Freddie Mac compiles its weekly report from data supplied by the nation’s mortgage lenders concerning borrowers who have paid down at least 20 percent of their debt and have good credit.