30-Year Mortgage Rate Edges Up to 3.76 Percent, Freddie Mac Survey Says

Fixed mortgage rates increased in last week’s Freddie Mac Primary Mortgage Market Survey, though they still remained very close to their levels as of May 23, 2013.

30-year fixed-rate mortgage loans, which were previously hovering at 3.69 percent for the week ended February 12, moved up seven basis points to 3.76 percent. Last year, 30-year FRMs averaged 4.33 percent, or 57 basis points higher than the most recent levels. On the other hand, 15-year fixed rate mortgages moved past the 3 percent threshold once again, ticking up six hundredths of a percentage point from 2.99 percent last week to 3.05 percent last week. The year-ago average for 15-year fixed mortgages was 29 basis points higher at 3.35 percent.

30-Year Mortgage Rate

For adjustable-rate mortgages, 5-year hybrid ARMs held steady at 2.97 percent and remained 11 basis points lower than the year-ago average of 3.08 percent. 1-year ARMs, which were at 2.42 percent the week before, moved up three basis points to 2.45 percent, and are 30 basis points lower than the previous year’s 2.75 percent average.

“Mortgage rates rose for the second consecutive week as 10-year Treasury yields surged,” said Freddie Mac deputy chief economist Leonard Kiefer as he talked about the factors that influenced last week’s rate increases across the board. “Housing starts declined 2% to a seasonally adjusted pace of 1.065 million units and housing permits dipped 0.7% in January,” said Len Kiefer, deputy chief economist for Freddie Mac. “However, homebuilders remain confident about new home sales although slightly tempered from last month as the (National Association of Home Builders) Housing Market Index slipped 2 points to 55 in February.”

Aside from Freddie Mac, Bankrate also released its mortgage rate report for the week ended February 19, similarly revealing that interest rates were up once again. According to Bankrate, the upbeat January employment report continued to affect mortgage interest rates, as 30-year fixed-rate mortgages moved up six basis points from 3.90 percent to 3.96 percent. That remains 53 basis points lower than the year-ago average of 4.49 percent, but 15 basis points higher than the month-ago average of 3.81 percent.

15-year FRMs were up four basis points from 3.17 percent to 3.21 percent, 5/1 ARMs dipped one basis point from 3.32 percent to 3.31 percent, while 30-year fixed-rate jumbo mortgages (balance of $417,001 or more) added a single hundredth of a percentage point, moving from 4.10 percent to 4.11 percent.

Further analyzing the variables that affected mortgage rates last week, Bankrate also cited European economic activity, primarily news that Greece is on the verge of working out a bailout deal with its creditors. As such, investors are now hedging their bets on investments with more risk and taking their money out of traditional safe havens like U.S. treasuries.

Still, some believe that mortgage rates should not have increased the way they have over the past few weeks. “It defies logic,” said mortgage planner James Sahnger, who believes rates will eventually go back down. “But rates always go higher faster than they come down, so it could take a couple of weeks — it could take a couple of months.”