The perception of a strengthening economy was the catalyst behind the increase in rates for the 30-year and 15-year fixed-rate mortgage this week, according to the most recent Freddie Mac Primary Mortgage Market Survey.
The 30-year fixed-rate mortgage averaged 4.8% with an average 0.7 point for the week ending Jan. 27, up 6 basis points from last week when it averaged 4.74%. Meanwhile, the 15-year FRM increased 4 BPs to average 4.09% with an average 0.7 point.
Adjustable rates tracked by Freddie Mac also increased, but only by a single basis point. The 5-year Treasury-indexed hybrid ARM averaged 3.7% this week, with an average 0.7 point, up from last week when it averaged 3.69%. The one-year Treasury-indexed ARM averaged 3.26% this week with an average 0.6 point, up from last week when it averaged 3.25%.
Freddie Mac chief economist Frank Nothaft said mortgage rates followed bond yields upward as reports from the Conference Board suggest that the U.S. economy is strengthening.
“Consumer demand in the housing market is also showing some positive gains. Sales of existing homes rose in December to the strongest pace since May and sales of new homes jumped to the highest since April. At their current sales rate, the expected time on the market fell from 9.5 to 8.l months for existing houses and fell from 8.4 to 6.9 months for new homes,” he added.
