Economic improvement sees recent rise in mortgage rates
Posted on Thursday, March 14, 2013 at 3:23:42 PM
Positive increases exhibited in the job market and consumer spending during the past month could have been the reason a notable increase in national mortgage rate averages was seen last week.
In its Primary Mortgage Market Survey, Freddie Mac reported fixed-rate mortgages (FRMs) jumped in the first week of March, after having remained largely unchanged for several preceding weeks.
Average 30-year FRMs were recorded at 3.63 percent, rising from 3.52. The recent figure marks the highest level registered since August 2012, and represents year-over-year improvement, as rates seen the same time last year averaged 3.92 percent. After being logged at 2.76 percent during prior weeks, average 15-year FRMs rose to 2.79 percent last week. Aside from the recent increase, improvement is still evident, as rates averaged 3.16 percent during the same week in March 2012.
"Fixed mortgage rates rose this week on stronger signs of jobs growth and consumer spending," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7 percent. This ... led to a 1.1 percent increase in retail sales."
Because of the recent jump in loan interest rates, many first time home buyers may have held off on hunting for a home loan, as mortgage application figures saw a decrease for the week ending March 8.
According to the Mortgage Bankers Association, on a seasonally adjusted basis, the number of mortgage applications dropped nearly 5 percent from numbers seen the previous week. In addition, the refinance share of activity fell to 76 percent of total applications, which is its lowest level reached since May 2012.
With evidence of the bolstering national economy becoming more apparent, consumers considering obtaining residential lending and purchasing property may find themselves amid increasing advantageous market conditions. Those looking to finance a home sale may benefit from researching opportunities with Home Loan Investment Bank.