After two weeks of little movement, Freddie Mac's Primary Mortgage Market Survey reported average rates for 30-year fixed rate mortgages rose while 15-year FRMs remained unchanged.
According to the survey for the week ending February 21, the average rate for 30-year FRMs rose to 3.56 percent, up from 3.53 percent recorded the week before. Despite the weekly increase, averages have remained below those seen a year ago, providing both buyers and those looking to refinance their initial mortgage the opportunity to make the investment for less or lower their monthly mortgage payments. The most recent average remains below the 3.95 percent average recorded the same time last year, but economists say averages will stay below 4 percent throughout 2013.
The average rate for 15-year FRMs stayed at 2.77 percent and continue to be more affordable when compared to the 3.19 percent from a year ago.
In addition, the average rate for 5-year adjustable-rate mortgages was also dormant, matching last week's 2.64 percent average. ARMs have been less popular, as noted in the Mortgage Bankers Association's application report, which revealed only 4.2 percent of all applicants selected an adjustable rate. This could be because averages have been approaching levels seen a year ago, when the 5-year ARM rate was 2.8 percent.
The average rate for 1-year ARMs increased slightly over the week, to 2.65 percent from 2.61 percent. This time last year the average rate was 2.73 percent.
Vice president and chief economist Frank Nothaft credits the varying results in recent weeks to a slow but steady stabilization.
"Mortgage rates have been relatively stable, hovering near record lows, for the past four weeks which is helping to spur new home construction," said Nothaft. "For instance, new construction on single-family houses rose to an annualized rate of 613,000 in January, the most since July 2008. In addition, single-family building permits were up to the highest issuance level since June 2008."
The return of consumer confidence in the economy and national housing market helped boost sales of existing and foreclosed houses, which has also pushed the average sales price higher, closing the gap between buyer demand and seller supply. With the busier seasons of spring and summer just around the corner, the inventory of available homes for sale is expected to grow and activity will also likely rise.