Mortgage Rates Inch Upward

""Freddie Mac"":http://www.freddiemac.com released the results of its ""Primary Mortgage Market Survey (PMMS)"":http://www.freddiemac.com/pmms/release.html on Thursday, which showed that mortgage interest rates rose this week for both long- and short- term home loan products. The GSE attributed the increase to recently issued reports which signaled optimism that the national economy may be starting to turn around.
Frank Nothaft, Freddie Mac's VP and chief economist, explained, ""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.""
Nothaft added that the positive news was corroborated by Federal Reserve Chairman Ben Bernanke when he stated that he expects economic activity to bottom out, then to turn up later this year. ""He [Bernanke] also noted that the housing market is beginning to stabilize,"" Nothaft said. ""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.""
Based on Freddie Mac's market data, the interest rate for a 30-year fixed-rate mortgage (FRM) averaged 4.84 percent (0.7 point) for the week ending May 7, 2009. Last week the 30-year FRM averaged 4.78 percent, and last year at this time, it was 6.05 percent.
The 15-year FRM this week came in at 4.51 percent (0.7 point), up from last week when it averaged 4.48 percent. A year ago at this time, the 15-year FRM averaged 5.60 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.90 percent this week (0.6 point), a jump from last week when they averaged 4.80 percent. A year ago, the 5-year ARM was 5.67 percent.
One-year Treasury-indexed ARMs averaged 4.78 percent this week (0.6 point). Last week, the 1-year ARM averaged 4.77 percent, and at this time last year, it was 5.29 percent.