Mortgage Interest Rates Pick Up Amid Economic Gains

Mortgage Interest Rates Pick Up Amid Economic Gains

09/05/2013 BY: TORY BARRINGER

Mortgage rates bounded back up this week, nearly matching their year-highs as markets await Friday’s Employment Situation Report.

Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed-rate mortgage (FRM) at an average 4.57 percent (0.7 point) for the week ending September 5, up from 4.51 percent in August’s last week. A year ago at this time, the 30-year FRM averaged 3.55 percent.

The 15-year FRM this week averaged 3.59 percent (0.7 point), up from 3.54 percent previously.

Adjustable rates also climbed. The 5-year Treasury-index hybrid adjustable-rate mortgage (ARM) averaged 3.28 percent this week (0.5 point), rising from 3.24 percent.

The 1-year ARM reached 2.71 percent (0.5 point), up from 2.64 percent.

Freddie Mac chief economist Frank Nothaft attributed the week’s gains to recent economic improvements.

“Mortgage rates edged up this week on signs of a stronger economic recovery,” Nothaft said. “RealGDP 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, Bankrate.com reported an average 4.72 percent rate for the 30-year FRM—up 10 basis points over the week—while the 15-year FRM rose eight points to 3.74 percent.

The 5/1 ARM increased to 3.65 percent in Bankrate’s weekly national survey.

“Some better economic news, in particular news on manufacturing and the Federal Reserve’s Beige Book report, tilted the odds a little more in favor of the Fed beginning to dial back their stimulus later this month,” Bankrate said in its weekly release. “However, the decision likely hinges on the upcoming employment report, with a strong report giving the Fed the cover they need to taper their bond purchases despite the looming debt ceiling and government budget debates.”

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