Fannie and Freddie Report Rising Rates Last Week

Mortgage interest rates increased during the week endedrnDecember 17 as the economy showed continued signs it is climbing out of thernrecession.

According to the Primary Mortgage Market Survey conducted byrnFreddie Mac, the interest rate for the 30-year fixed-rate mortgage (FRM) jumpedrnto 4.94 percent with 0.7 point from an average of 4.81 percent with 0.7 pointrnduring the week ended December 10.

The increase in the rate for the 15-year FRM was less sharprnbut rates did average 4.38 percent with 0.6 point compared to 4.32 percent withrn0.6 point the week before.

The rate for the 5-year Treasury-indexed hybridrnadjustable-rate mortgage (ARM) increased by 11 basis points to 4.37rnpercent.  Fees and points were unchangedrnat 0.6 point.

The 1-year Treasury-indexed ARM rose to 4.34 percent withrn0.5 point from 4.24 percent also with 0.5 point.

Frank Nothaft, Freddie Mac vice presidentrnand chief economist said, “Mortgage rates followed bond yields higherrnonce again this week amid signs of an improving economy. On the consumer side,rnretail sales jumped 1.3 percent in November and consumer sentiment, as measuredrnby the University of Michigan, rose above the market consensus forecast to thernhighest reading since September.  Industrial production also showed largerngains in November.

“Interest rates on 30-year fixed-rate mortgages have remained below fivernpercent over the past seven weeks and are contributing to a wave of refinancernactivity.  Roughly three out of four mortgage applications were forrnrefinancing during the first two weeks of December, according the MortgagernBankers Association.”

Fanny Mae's Weekly Yields were also up for the week.  The conventional 30-year FRM had an averagernyield of 4.61 percent during the week ended December 11 compared to a yield ofrn4.54 percent one week earlier.  Thern15-year FRM rose three basis points to 3.94 percent while the governmentrnguaranteed FHA/VA 30-year FRM averaged 5.5 percent compared to 5.45 a weekrnearlier.

The 1-year ARM had an average rate of 3.01 percent.  The yield during the week ended December 4rnwas 2.95 percent.

All Fannie Mae yields are reported net of servicing fees.

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