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Mortgage Interest Rates Trend Higher

Hands over small house
Mortgage interest rates nudged higher this week according to a Freddie Mac survey.

For the week ending March 28, 2013, the 30-year fixed-rate mortgage (FRM) averaged 3.57 percent with an average 0.8 point, up from last week when the rate was 3.54 percent. Although the rate is rising, it is still lower than the reading on March 14, where it reached a high of 3.63 percent. A year ago, the 30-year FRM averaged 3.99 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, attributes the new housing market strength to low and steady mortgage rates. The most common mortgage, the 30-year-fixed rate, has remained below four percent for over a year.

This week’s 15-year fixed-rate mortgage averaged 2.76 percent with a 0.7 point. This rate is up from last week’s average of 2.72 percent. Last year at this time, the 15-year fixed mortgage interest rate averaged 3.23 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.68 percent with a 0.6 point this week, up from last week when it averaged 2.61 percent. A year ago, the 5-year ARM averaged 2.90 percent.

This week’s 1-year Treasury-indexed ARM averaged 2.62 percent with a 0.3 point. The rate is down from last week’s average of 2.63 percent. At this time last year, the rate averaged 2.78 percent.

The impact of the mortgage interest rates was multi-faceted. First, both existing and new homes sales saw increases. According to the National Association of Realtors, existing home sales during January and February increased at the strongest rate since November 2009. New home sales experienced the largest burst since August and September 2008.

Secondly, the dual increase helped to improve the S&P/Case-Shiller home price index which posted its highest reading since December 2008.

Finally, homeownership projections increased. According to the Conference Board, the number of consumers expecting to purchase a home in the next six months reached 5.6 percent in March. This was the second highest rate since the board began collecting data in February 1964.