Buoyed by a spate of good economic news, mortgage interest rates rose slightly from the record low territory of the last few weeks according to results of Freddie Mac's weekly survey.
The Primary Mortgage Market Survey released this morning reports that the 30-year fixed-rate mortgage (FRM) rose to 4.84 percent during the week ended May 7. This was an increase of six basis points from the previous week's average of 4.78 percent which had tied the record for the lowest rate since Freddie Mac began its survey. Fees and points during both weeks averaged 0.7.
The 15-year FRM had an average rate of 4.52 percent with 0.7 point, up from the record low rate of 4.48 percent that had held firm for the three previous weeks. Fees and points last week also averaged 0.7.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.90 percent this week with an average 0.6 point. Last week the hybrid averaged 4.80 percent with 0.6 point, the lowest rate reported since Freddie Mac first tracked this product in January 2005.
One-year Treasury-indexed ARMs averaged 4.78 percent this week with an average 0.6 point, up from last week when the average was 4.77 percent.
In releasing the data Frank Nothaft, Freddie Mac vice president and chief economist commented, "Mortgage rates rose slightly this week amid positive economic news that the economy may be approaching the bottom of the recession." In terms of the household sector, the final April estimate of consumer sentiment, as measured by the University of Michigan, was revised above the market consensus. On the business side, the ISM Manufacturing Index for April also exceeded market expectations.
"In addition, the positive news was corroborated by Fed Chairman Bernanke when he stated that he expects economic activity to bottom out, then to turn up later this year. He also noted that the housing market is beginning to stabilize. For instance, pending existing home sales rose for the second consecutive time in March and represented the first back-to-back monthly increase since March 2008. Furthermore, in its April 2009 Senior Loan Officer Opinion Survey, the Federal Reserve found the demand for prime mortgages rose for the first time since April 2007 when it first began collecting such detailed mortgage data."
Earlier in the week Fannie Mae released data on the weekly yield for its mortgage loans during the week ended May 1.
The conventional 30-year FRM had a yield of 4.49 percent compared to a yield of 4.42 percent one week earlier while the 15-year FRM was unchanged at 4.20 percent.
Government guaranteed FHA and VA 30-year loans were also up with an average of 5.74 percent compared to 5.58 percent during the week ended April 24.
The one-year ARM dropped 6 basis points to 3.32 percent.
Quoted Fannie Mae yields are net of servicing fees.