Home prices matched many economists' expectations, posting significant growth throughout the majority of 2012, though mortgage rates have surprised many by remaining near record levels. While fixed-rate options have been lingering near record lows, the most recent Primary Mortgage Market Survey from Freddie Mac shows mixed figures for the week ending December 20.
The average rate for 30-year FRMs, a heavily preferred mortgage option by both first-time buyers and those refinancing, was up from the previous week, reaching 3.37 percent from 3.32 percent. Despite the notable increase, the average provides more affordable than offered this time a year ago when it was 3.91 percent. A recent outlook report for 2013 from Freddie Mac shows average rates for FRMs are predicted to stay lower than 4 percent, which could help boost home prices, acting as a catalysts for the housing market recovery.
Additionally, 15-year FRMs will likely see rates well below levels in recent years, according to the outlook, the average rate for the third week of the month fell from the week before, slipping to 2.65 from 2.66 percent. However, this is still significantly lower than this time a year ago when the average rate for 15-year FRMs was 3.21 percent.
Adjustable-rate mortgage have not historically been a widely selected mortgage term for buyers, but homeowners who have seen a jump in income and are looking to pay off their property sooner may be more likely to select this when refinancing. The average rate for 5-year ARMs has been quickly approaching levels seen last year, and the most recent survey from the government-sponsored enterprise shows it moved forward on a week-over-week basis to 2.71 percent from 2.70 percent.
Mixed rates across the board have been credited to varying economic factors, though both builder and consumer sentiment have been on the rise throughout most the year.
"Mortgage rates were mixed this week following data reports on stable inflation and a thriving home construction market," said Frank Nothaft, vice president and chief economist of the GSE. "The 12-month growth in the core consumer price index has remained between 1.9 and 2.1 percent for the past five consecutive months ending in November. Meanwhile, housing starts averaged the strongest three months in November since September 2008 and homebuilder confidence rose in December to its highest reading since April 2008."