Home loan rates rise for third straight week
(MoneyWatch) Fixed mortgage rates are on the rise for the third week in a row, according to Freddie Mac (FMCC).
The increase in rates on home loans, along with recent government data showing that housing starts in July were up
21.5 percent from the year-ago period, suggest that the economic recovery is gathering speed.
"Inflation remains in check, with 12-month growth in the core consumer price index falling for a second month to 2.1 percent in July," said Frank Nothaft, chief economist with the housing finance agency, in a statement. "At the same time, industrial production rose 0.6 percent in July, compared to a 0.1 percent increase in June, and retail sales jumped 0.8 percent in July from a 0.7 percent decline in June."
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Mortgage rates for the week ending August 16, 2012, are as follows:
- A 30-year fixed-rate mortgages (FRM) averaged 3.62 percent, up from last week's average of 3.59 percent. At this time last year, the 30-year FRM averaged 4.15 percent.
- 15-year FRMs averaged 2.88 percent, up from from last week's rate of 2.84 percent. A year ago, the 15-year FRM averaged 3.36 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged 2.76 percent, down from last week's average of 2.77 percent. In the year ago-period, the 5-year ARM averaged 3.08 percent.
- 1-year Treasury-indexed ARMs averaged 2.69 percent, up from 2.65 percent last week. At this time last year, the 1-year ARM averaged 2.86 percent.
Although a 0.8 percent increase in retail sales hardly qualifies as a "jump," the combination of improving economic factors Freddie Mac points to may make life marginally easier for consumers as they wait for the recovery to kick into gear.
The National Association of Home Builders (NAHB) recently reporting that home prices are strengthening. Despite the slightly lower housing affordability the NAHB reported in the second quarter of 2012, prices remain reasonable. More than 73 percent of all new and existing homes sold in the second quarter were affordable to families earning the national median income of $65,000.
That's good news for buyers looking to take advantage of today's low mortgage rates before they move higher.
