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Start of 2014 sees an increase in mortgage rates

Posted on Thursday, January 2, 2014 at 10:24:45 AM

Those looking for a downward trend in residential financing rates for 2014 will have to wait a little bit longer.

While numbers are still considered affordable, Freddie Mac reported that mortgage rates have climbed slightly for the week ending Jan. 2. The 30-year fixed-rate mortgage averaged 4.53 percent, up from last week's average of 4.48 percent. The 15-year FRM averaged 3.55 percent, up from 3.52 percent, and the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.05 percent, compared to 3.00 percent last week.

"Mortgage rates edged up to begin the year on signs of a stronger economic recovery," said Frank Nothaft, vice president and chief economist for Freddie Mac. "The pending home sales index inched up 0.2 percent in November, after five consecutive months of decline. The Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller 20-city composite house price index rose 13.6 percent over the 12-months ending in October 2013."

These changes in residential financing may have some people looking at other options, like an adjustable rate instead of a fixed one. According to the Los Angeles Times, ARMs have become more popular due to their increased affordability. These options can reduce monthly payments, although the possibility of a rising rate adds additional risk.