Mortgage Interest Rates Edge Up Slightly in Latest Freddie Mac, Bankrate Surveys

Though, mortgage rates were up a bit in Freddie Mac’s mortgage survey for Christmas week, they nonetheless remained much lower than they were one year ago, with 30-year fixed-rate mortgages still safely below the crucial 4 percent threshold.

According to Freddie Mac’s Primary Mortgage Market Survey for the week ended December 24, 2014, 30-year fixed-rate mortgages were at 3.83 percent, or three basis points higher than the previous week’s average of 3.80 percent. This is still a good deal lower than the year-ago figure of 4.48 percent, and 17 basis points below the 4 percent mark where 30-year FRMs hovered above for most of the year.

Mortgage Interest Rates Edge Up Slightly in Latest Freddie Mac, Bankrate Surveys

Also ticking up were 15-year fixed mortgage rates, which edged up one basis point from 3.09 percent to 3.10 percent, 5-year adjustable rate mortgages, which were at 3.01 percent, or six basis points higher than the previous week’s 2.95 percent reading, and 1-year ARMs, which ended the week at 2.39 percent, up from 2.38 percent last week. These figures, save for 5-year ARMs, are also substantially lower than their year-ago averages on Freddie Mac’s survey. One year ago, 15-year FRMs were at 3.52 percent, 5-year ARMs at 3 percent, and 1-year ARMs at 2.56 percent.

Freddie Mac vice president and chief economist Frank Nothaft attributed the upticks to “mixed” economic reports ahead of the Christmas holidays. “Mortgage rates were up slightly, following a week of mixed economic releases,” said Nothaft in a statement.

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“Existing home sales were down 6.1 percent November to annual rate of 4.93 million units, below economists’ expectations. New home sales fell 1.6 percent ast month to an annual rate of 438,000, also below expectations. Meanwhile, the third quarter real GDP was revised sharply higher to 5 percent according to the final estimate released by the Bureau of Economic Analysis.”

Similar to Freddie Mac, Bankrate also reported slight increases in its own weekly mortgage rate survey. Bankrate’s average rate for 30-year FRMs was up two basis points from 3.94 percent to 3.96 percent, marking the first weekly increase in six weeks. Like Freddie Mac, Bankrate had reported 30-year fixed mortgage rates above 4 percent for most of the year, with Bankrate’s average rates typically skewing higher than Freddie’s. 15-year FRMs were up from 3.21 percent to 3.25 percent, while 5/1 ARMs moved up a more substantial seven basis points, jumping from 3.21 percent to 3.28 percent.

In Bankrate’s report, the company cited worldwide economic concerns as the main set of variables affecting mortgage rates and causing them to tick up this holiday season. “Investors continue to be concerned about the health of economies overseas with evidence that China’s growth is slowing, the eurozone countries are struggling and Japan’s future remains uncertain,” wrote Bankrate. “The recent swan dive by the Russian ruble only deepened worries about the global economy.”

Bankrate also quoted IHS director of U.S. financial economics Paul Edelstein, who said that domestic economic trends “point to higher long-term interest rates” while forecasting mortgage rates to move up slowly in 2015 as the U.S. Federal Reserve moves towards increasing its federal funds rate. The language of the Fed’s most recent statement suggests that it is aiming to gradually increase interest rates amid the backdrop of improving economic statistics, including the U.S. unemployment rate.