Mortgage rates sliding
For most of 2012, mortgage rates have dropped slightly each week, according to the Freddie Mac Primary Mortgage Market Survey, and have only increased slightly in one week in April, and another in June, but this week, Freddie reports that rates have gone up.
The report notes that 30-year fixed-rate mortgage loans average an interest rate of 3.55 percent this week (up from 3.49 percent last week), while the 15-year fixed-rate mortgage rate rose from 2.80 percent to 2.83 percent.
The increase in rates is not major, but is a reversal of the forward momentum of sliding rates is a reflection of Europe’s debt crisis, along with our own economic situation.
Mixed economic signals
Frank Nothaft, vice president and chief economist of Freddie Mac said in a statement, “Recent announcements of additional debt relief for the Eurozone and mixed domestic economic indicators added upward pressure on Treasury yields as well as mortgage rates this week. The U.S. economy grew at a 1.5 percent annualized rate in the second quarter, slower than the 2.0 percent growth in the first quarter with consumer spending in June unchanged from May. However, consumer confidence rose in July for the first time in five months according to The Conference Board.”
“Housing data were also assorted,” Nothaft continued. “The S&P-500 Case Shiller® 20-City Composite Index rose for the fourth consecutive month in May with 18 of the cities experiencing positive growth. Nonetheless, pending home sales fell 1.4 percent in June, below the market consensus forecast of a 0.3 percent increase, and May’s figure had a downward revision.”
Meanwhile, mortgage application volume continues to rise, according to the Mortgage Bankers Association, with applications for mortgages being refinanced hit a three year high.
It is not projected that the rates will skyrocket, but it is possible that rates may increase slightly in coming weeks, which will not likely deter buyers, as rates continue to be at historic lows.