Mortgage interest rates: Highest in a year
(MoneyWatch) Fixed mortgage interest rates are at their highest point in more than a year, and aren't showing any signs of changing course.
Interest rates have slowly been creeping up over the past few weeks, marking a turnaround from last year's downward trend, according to weekly averages released by Freddie Mac. Though interest rates have yet to even hit 4 percent, they're inching closer every week.
The 30-year fixed-rate mortgage rate hit 3.81 percent this week, up from last week's 3.59 percent, even beating out last year's rate of 3.75 percent. The 15-year FRM barely beat last year's 2.97 percent, averaging 2.98 percent this week.
Mortgage rates have fluctuated quite a bit this year. They started climbing at the beginning of the year, before falling in early May to 3.35 percent, which is almost as low as they go. Since then, they've been steadily marching upward.
The thrust behind climbing rates is actually the positive economic news coming out of the housing market this month, and most analysts seem to feel pretty solid in saying that the recovery is here to stay.
A number of home price indices, from Case-Schiller to Freddie Mac to the National Association of Realtors all show home prices are continuing to increase. Homes sales are also up, despite reports of low inventory.
Consumer confidence is at a five-year high, according to the Conference Board, an economic and business research firm.
Any good economic news typically spells higher interest rates.
While the Federal Reserve has helped keep interest rates low to encourage home buying, the time is coming soon when that kind of artificial manipulation of the market won't be necessary. People are already rushing to buy homes while prices and interest rates remain low. It's only a matter of time before they creep back to the normal six or seven percent.
Mortgage rates for the week ending May 31, 2013:
30-year FRM averaged 3.81 percent with an average 0.8 point for the week ending May 30, 2013, up from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 3.75 percent.
15-year FRM averaged 2.98 percent with an average 0.7 point, up from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 2.97 percent
5-year Treasury-indexed hybrid adjustable-rate mortgages haven't beat their rates from last year, they too are trending upward. The 5-year Treasury-indexed hybrid ARM hit 2.66 percent this week with an average .5 point, up from last week's 2.63 percent, but is still under last year's 2.84 percent.
The 1-year Treasury-indexed ARM bucked the trend and hit 2.54 percent this week with an average .5 point, down from last week's 2.55 percent and still under last year's 2.75 percent.
