Mortgage Rates Head Upward Last Week of the Year

Mortgage interest rates began to climb again last week, after falling the week prior for the first time in more than a month.

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""Freddie Mac"":http://www.freddiemac.com says the results of its ""latest market survey"":http://www.freddiemac.com/pmms/release.html?week=52&year=2010 reveal a rise for mortgage rates on all loan products included in the study except the 1-year adjustable-rate mortgage (ARM).

The jump brings 30-year mortgage rates back to levels not seen since May of 2010, while the 15-year rate has hit its mark from last June. Even so, Freddie Mac says ""mortgage rates remain incredibly low.""

The GSE reports that the 30-year fixed-rate mortgage averaged 4.86 percent (0.8 point) for the week ending December 30, 2010, up from 4.81 percent the week prior. Last year at this time, Freddie says the 30-year rate was averaging 5.14 percent.

The 15-year fixed mortgage last week averaged 4.20 percent (0.8 point) in Freddie Mac's survey, which is based on data gathered from about 125 lenders across the country. The week before, it was 4.15 percent, and a year earlier, the 15-year FRM averaged 4.54 percent.

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The 5-year ARM rose from 3.75 percent the previous week to 3.77 percent (0.7 point) last week. Freddie reports that the 1-year ARM, however, dropped from 3.40 percent to 3.26 percent (0.6 point).

Frank Nothaft, Freddie Mac's chief economist, commented, ""Interest rates on fixed mortgages and the 5-year hybrid ARM rose slightly over the holiday week, but were still below the year's highs set in the first half of 2010.""

Nothaft added, ""For the year as a whole, 30-year fixed mortgage rates averaged just below 4.7 percent, which represented the lowest annual average since 1955 when secondary market yields on FHA [Federal Housing Administration] mortgages were above 4.6 percent and the average price of a home was $22,000.""

Mortgage rates across the board climbed higher in a separate industry study ""released by Bankrate"":http://www.bankrate.com/finance/mortgages/mortgage-rates-rise-to-end-year.aspx, which is sourced from data provided by the top 10 banks and thrifts in the top 10 U.S. markets.

Among these lenders, the tracking company says the average conforming 30-year fixed mortgage rate rose to 5.02 percent (0.44 point) for the week ending December 30. Seven days earlier, the 30-year rate was 4.96 percent.

The average 15-year fixed mortgage increased to 4.39 percent (0.40 point), up from 4.29 percent the week prior. The larger jumbo 30-year fixed rate rose from 5.59 percent to 5.64 percent in Bankrate's weekly survey.

Adjustable rate mortgages also went up, with the average 5-year ARM rising to 4 percent and the average 7-year ARM reaching 4.43 percent.

In addition to its weekly rate review, Bankrate surveys a panel of mortgage experts to gauge the direction rates on home loans are headed over the next seven days. More than half of the panelists, 55 percent, believe mortgage rates will continue to rise.