Financial markets respond to fresh evidence that the economy is picking up momentum.
WASHINGTON — Mortgage rates rose for a fourth consecutive week as financial markets responded to fresh evidence that the economy is picking up momentum.
In its weekly survey, mortgage giant Freddie Mac reported today that rates on 30-year, fixed-rate mortgages rose to a nationwide average of 5.77 percent this week. That was up from 5.73 percent last week.
It marked the fourth consecutive weekly gain in the 30-year mortgage, the longest stretch of increases since mortgage rates rose for seven straight weeks in February and March.
But even with the increases, 30-year mortgages have stayed below 6 percent for all but two weeks this year. These low rates have helped to power home sales with both new and existing home sales hitting record levels in June.
“Although inching upwards, the average 30-year fixed-rate mortgage rate for the month of July was lower than the annual averages since our survey began in 1971,” said Frank Nothaft, chief economist at Freddie Mac.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.34 percent this week, up from 5.32 percent last week.
For one-year adjustable rate mortgages, rates increased to 4.46 percent, compared with 4.42 percent last week. It marked the highest level for one-year ARMs in three years, since they averaged 4.50 percent the week of July 19, 2002.
Nothaft predicted that home buyers will begin shifting out of one-year ARMs because “the uncertainty of future monthly payments may outweigh the savings realized in the initial rate period.”
Rates on five-year hybrid adjustable rate mortgages averaged 5.27 percent, up from 5.26 percent last week.
The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year mortgages and 15-year mortgages each carried an average fee of 0.5 point this week. One-year ARMs and five-year ARMs carried an average fee of 0.6 point this week.
A year ago, 30-year mortgages averaged 6.08 percent, 15-year mortgages were at 5.49 percent and one-year ARMs averaged 4.17 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.