Mortgage rates moved higher this week, with fixed rates near their highest points reached since they began rising in late spring.

Average interest rates on 30-year fixed-rate mortgages rose to 4.57 percent, up from 4.51 percent last week, according to the weekly Freddie Mac rate survey, and a single basis point from matching their high point of 2013. Fifteen-year fixed-rate loans increased to an average of 3.59 percent, also a single point below their recent highs, and up from 3.54 percent last week.

Adjustable-rate mortgages also saw higher rates this week, with initial rates on 5-year Treasury indexed ARMs rising to 3.28 percent, up from 3.24 percent previously. All rates are based on loans with an 80 percent loan-to-value ratio; fixed-rate mortgages include an average of 0.7 points in fees and discounts; ARMs include 0.5 points.

Economic signs point to Fed action

The increase was attributed to signs of a strengthening economy, which economists believe increases the likelihood the Federal Reserve will scale back its support for low interest rates when its board of governors meets later this month.

Government figures released this week showed that real GDP increased by 2.5 percent in the second quarter of the year, revised upward from the figure of 1.7 percent originally estimated and more than double the rate in the first quarter of the year.

In addition, the Census Bureau reported that residential construction spending rose in July for the ninth consecutive month, while manufacturing activity in August showed its strongest increase in more than two years.

Published on August 7, 2008