The housing market has been heating up over the summer, with both pending and existing home sales posting their strongest showings of the year in July.
Mortgage Rates Turn Sharply Up
Mortgage rates are up sharply this week, with the most popular loan types up a full tenth of a percentage point, according to the weekly Freddie Mac rate survey.
Average interest rates on 30-year fixed-rate mortgages rose to 3.53 percent, up from 3.42 percent the week before, while 15-year fixed-rate loans rose to 2.81 percent, up from 2.71 percent previously.
It's the highest either rate has been in over four months.
A smaller rise was seen for average initial rates on 5-year adjustable rate mortgages (ARMs), which increased to 2.70 percent, up from 2.67 percent last week.
Frank Nothaft, Freddie Mac chief economist, suggested that rates were responding to signs of a growing housing market. He noted that new home sales hit their highest level in three years in 2012, with the Census Bureau reporting 367,000 units, and their first annual increase in seven years.
The National Association of Realtors (NAR) recently reported that 2012 pending home sales were at their highest level since 2006, with a 5.5 percent annual increase through November, and that home prices also showed their strongest annual gains since that same year, with the S&P/Case Shiller indices showing a 5.5 percent rise in home prices over the 12 months ending in November.
Figures released today by the Commerce Department show that residential fixed investment added 0.4 percentage points to GDP growth in the fourth quarter of 2012, despite an overall decline in gross domestic product of 0.1 percent during that period.
First published at: http://www.mortgageloan.com/mortgage-rates-turn-sharply-9352
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