For the second week in a row, mortgage interest rates have edged up, according to data released Thursday by Freddie Mac. The GSE’s chief economist attributed the rise to positive news on the economic front that suggests the recovery is gaining some traction and consumers are more confident in the job market.
According to Freddie Mac’s latest study, the average rate on a 30-year fixed mortgage increased to 4.80 percent (0.7 point) for the week ending January 27, 2011. That’s up from last week’s average of 4.74 percent.
The GSE’s survey, which is based on data gathered from about 125 lenders across the country, shows that the 15-year fixed rate averaged 4.09 percent (0.7 point) this week, up from 4.05 percent last week.
Freddie Mac also reported increases for adjustable-rate mortgages (ARMs), with the 5-year ARM rising from 3.69 percent last week to 3.70 percent (0.7 point) this week, and the 1-year ARM edging up from 3.25 percent to 3.26 percent (0.6 point).
“Mortgage rates followed bond yields a little higher this week amid positive data reports from the Conference Board that suggest the economy is strengthening,” explained Frank Nothaft, Freddie Mac’s VP and chief economist. “The index of leading indicators rose 1.0 percent in December, nearly twice that of the market consensus forecast and represented the sixth consecutive monthly increase, according to the board.”
Nothaft added, “They also reported a stronger gain in consumer confidence for January, rising to an eight-month high. In addition, the share of households who said jobs were plentiful rose to the highest level since May 2009.”
A separate study by Bankrate described the movement in mortgage rates as “a mixed bag…”