Consumers and real estate professionals are likely remaining positive as reports of improving economic factors flood the airways and make the front page of newspapers. The latest Primary Mortgage Market Survey from government-sponsored enterprise Freddie Mac revealed average rates for mortgages rose on a week-over-week basis across the board.
Data from the survey for the week ending March 14 showed the average rate for 30-year fixed-rate mortgages reached its highest level since August 23, 2012 at 3.63 percent. This is a leap forward from the 3.52 percent gain seen last week, though the average is still modest in comparison to the 3.92 percent average recorded this time last week. Thirty-year FRMs will likely remain a highly chosen option for buyers, as it provides them with lower monthly payments despite having a higher rate.
The average rate for 15-year FRMs also increased, though not on the same scale, growing from 2.76 percent last week to 2.79 percent the second week of March. This time a year ago the average rate for 15-year FRMs was 3.16 percent.
Average rates vary, still nearing 2012 averages
Buyers and those refinancing who are considering a 5-year adjustable-rate mortgage may be glad to hear that the average rate for this mortgage option fell to 2.61 percent from 2.63 percent recorded the previous week, though the average is still near the 2.83 percent rate recorded this time last year.
One-year Treasury-indexed ARM averaged 2.64 percent in the most recent report with a 0.4 point gain, up from last week when it averaged 2.63 percent. At this time last year, the 1-year ARM averaged 2.79 percent.
"Fixed mortgage rates rose this week on stronger signs of jobs growth and consumer spending," said Frank Nothaft, vice president and chief economist of Freddie Mac. "The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7 percent. This helped offset the effects of the payroll tax holiday expiration and led to a 1.1 percent increase in retail sales, which was well above the market consensus forecast."
While rates grew a sizable amount, economists of the GSE don't expect averages for FRMs to grow above 4 percent in 2013, which means prospective buyers and those looking to refinance their initial mortgage can do so at a lower cost.