Mortgage rates bumped upward last week, buoyed largely by encouraging news about job growth. However, at the same time the fees and points charged for originating these mortgages declined for three of the four products tracked by the report.

Freddie Mac's Primary Mortgage Market Survey reported that the 30-year fixed-rate mortgage (FRM) averaged 6.22 percent with an average 0.4 point for the week ending April 12, 2007, up from last week when it averaged 6.17 percent with 0.4 point. Last year at this time, the 30-year FRM averaged 6.49 percent.



At the same time the 15-year FRM increased by three basis points to 5.90 percent. Fees and points, however, declined from 0.5 to 0.4 point. A year ago, the 15-year FRM averaged 6.14 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) carried an average contract interest rate of 5.93 percent and 0.5 point up slightly from the week ended April 5 when it averaged 5.92 percent but with 0.6 point. A year ago, the 5-year ARM averaged 6.13 percent.

One-year Treasury-indexed ARMs came in at 5.47 percent with 0.5 point compared to the previous week's 5.44 percent and 0.6 point. At this time last year, the 1-year ARM was at 5.61 percent.

According to Frank Nothaft, Freddie Mac vice president and chief economist, "Interest rates in general ticked up following the release of the March employment data, which showed stronger job growth than what the market expected. This brought interest rates on 30-year fixed-rate mortgages back up this week to match the first quarter average."

"Mortgage refinancing still remains strong. The 30-year FRM rate has remained below 6-1/2 percent since mid August 2006, which helps explain why the share of total mortgage applications for refinance has remained above 40 percent since last August. Among those borrowers who are choosing to refinance now, a large share are doing so to avoid an adjustment to their monthly payment as the initial period on their adjustable-rate loan expires or to extract equity through a cash-out refi. In the fourth quarter of 2006, 84 percent of borrowers who refinanced their prime conventional loans increased their loan balance by more than 5 percent, totaling more than $70 billion in equity extracted. We expect a similar numbers for the first quarter of this year."

The Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association for the week ended April 13 shows similar across-the-board rate increases.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.22 percent from 6.16 percent, with points, including the origination fee, decreasing to 1.22 from 1.39.

15-year fixed-rate mortgages were up one basis point to 5.92, with points increasing to 1.18 from 1.15.

The rate for one-year ARMs increased to 5.89 from 5.88 percent, with points decreasing to 0.7 from 0.75.

Mortgage applications were down 2.5 percent on a seasonally adjusted basis and 2.2 percent unadjusted compared to the previous week but were up 9.9 from the same week in April last year.

Vincent Varma, Director of Industry Surveys at MBA stated that the Easter weekend probably lowered real estate activity and thus may have impacted on purchase application activities during the week.

Refinancing activity increased from 42.8 percent to 43.6 percent of all mortgage applications but the ARM share of the mortgage market continued its drop, down to 18.1 of all applications from 18.7 the week before.