Home Loan Interest Rates Bumped to Last Year’s Levels

Chart increasing numbers
Fixed home loan interest rates trended higher this week according to Freddie Mac’s weekly survey.

Freddie Mac, a provider of stability and liquidity for the United States’ residential mortgage markets, conducts weekly surveys to assess four types of home loan interest rates.

For the week ending Jan. 31, 2013, the 30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point. The rate is up from last week when it averaged 3.42 percent. A year ago, the 30-year FRM averaged 3.87 percent.

This is the first week the 30-year FRM has averaged above 3.5 percent since Sept. 13, 2012. The all-time historic low for the 30-year FRM was set during the week of Nov. 21, 2012 when it averaged 3.31 percent.

The 15-year fixed-rate mortgage averaged 2.81 percent with a 0.7 point, up from last week when it averaged 2.71 percent. At this time last year, the 15-year fixed home loan interest rate averaged 3.14 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.70 percent with a 0.6 point this week, an increase from last week’s rate of 2.67 percent. At this time last year, the 5-year ARM averaged 2.80 percent.

The 1-year Treasury-indexed ARM averaged 2.59 percent with a 0.5 point, up from last week when it averaged 2.57 percent. A year ago, the 1-year ARM averaged 2.76 percent.

“Mortgage rates continued to trend upwards this week amid a growing economy led in part by the recovering housing market,” said Frank Nothaft, vice president and chief economist for Freddie Mac, in a statement.

New home sales totaled 367,000 in 2012, the highest in three years and the first annual increase in seven years. Pending home sales in 2012 averaged its highest reading since 2006. Pending home sales is an index based on signed real estate contracts for available properties.

Additionally, the S&P/Case-Shiller 20-city composite house price index experienced the largest annual growth since August 2006, increasing 5.5 percent over the last year ending in November 2012.

“All of these factors helped residential fixed investment to add nearly 0.4 percentage points to real GDP growth in the fourth quarter alone,” Nothaft said.