Mortgage Rates Increase

Mortgage rates headed upward this week, with the averages on both 30- and 15-year home loans showing moderate increases.

Average interest rates on 30-year fixed-rate mortgages rose to 3.42 percent this week, according to today’s weekly Freddie Mac rate survey, up from 3.38 percent the week before. Average rates on 15-year loans rose to 2.71 percent, up from 2.66 percent previously.

It’s the highest 30-year mortgages have been in nearly four months, dating back to the week of Sept. 29. However, rates have remained relatively stable during that period and both 30- and 15-year rates remain within a one-tenth of a percentage point of their all-time lows reached in recent months.

One year ago this week, the two types of home loans averaged 3.98 percent and 3.24 percent, respectively.

ARMs unchanged

Meanwhile, initial interest rates on 5-year adjustable-rate mortgages (ARMs) were unchanged this week in the Freddie Mac survey, remaining at 2.67 percent. All rates are based on an 80 percent loan-to-value ratio; fixed-rate loans include an average of 0.7 points in fees and discounts; ARMs include 0.5 points.

“Fixed mortgage rates were up slightly over the (Martin Luther King Jr.) holiday week but remain highly affordable and should continue to aid in the ongoing housing recovery,” said Frank Nothaft, Freddie Mac chief economist.

He noted several trends that point to a strengthening housing market, including year-end data showing that existing home sales in 2012 were up 9.2 percent over the previous year, with a total of 4.65 million units, the highest total in five years, according to the National Association of Realtors.

Home prices showed significant gains during the year as well, with the most recent Federal Housing Finance Agency’s home purchase price index showing an annual gain of 5.7 percent, the biggest 12-month increase reported since June 2006.

First published at: http://www.mortgageloan.com/mortgage-rates-turn-upward-9345