Fixed Mortgage Rates Move Higher For Third Consecutive Week

Mortgage ratesFixed Mortgage Rates Move Higher For Third Consecutive Week

Mortgage rates rose this week as some positive economic data in the United States eased investors’ worries. One of the factors that helped push rates up this week was the release of a better-than-expected U.S. retail sales report that showed improvement in consumer spending for the first time in four months.
The Commerce Department says retail sales rose 0.8 percent in July, compared to the previous month. That’s much better than economists had expected after sales had declined for three months in a row, including a 0.7 percent drop in June. Consumer spending is considered a key economic indicator because it accounts for more than 70 percent of U.S. economic activity.
  • 30-Year Fixed Rate Mortgage-The 30-year FRM averaged 3.62 percent with an average 0.6 point for the week ending August 16, 2012, up from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 4.15 percent.
  • 15-Year Fixed Rate Mortgage-The 15-year FRMthis week averaged 2.88 percent with an average 0.6 point, up from last week when it averaged 2.84 percent.A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-Year Adjustable Rate Mortgage-Averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.77 percent. A year ago, the 5-year ARM averaged 3.08 percent.
  • 1-Year Adjustable Rate Mortgage-1-year Treasury-indexed ARMaveraged 2.69 percent this week with an average 0.4 point, up from last week when it averaged 2.65 percent. At this time last year, the 1-year ARM averaged 2.86 percent.

When those types of numbers come out, the stock market seems to do well and that’s not good for rates. That’s because when investors become more confident about the economy, there’s less demand for safe investments such as U.S. Treasury and mortgage bonds. The trend normally results in higher bond yields, which translates into higher mortgage rates.

Mortgage Rates For The Week Of 08/16/2012

30-Year FRM
30-Year FRM
15-Year FRM
15-Year FRM
5-Year ARM
5-Year ARM
1-Year ARM
1-Year ARM
Adding to the optimism, a major home builder survey reported that builder confidence increased for a fourth consecutive month in August. From the builder’s perspective, current sales conditions, sales prospects for the next six months and traffic of prospective buyers are all better than they have been in more than five years.
While there is still much room for improvement, we have come a long way from the depths of the recession, and the outlook appears to be brightening.
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