Two separate industry reports released Thursday show that interest rates for 30-year fixed mortgages moved up this week, while adjustable-rate mortgages dipped lower.
[IMAGE]""Freddie Mac's study"":http://www.freddiemac.com/pmms/release.html?week=3&year=2011 puts the average for a 30-year fixed-rate mortgage at 4.74 percent (0.8 point) for the week ending January 20, 2011. That's up from 4.71 percent last week. A full year ago, the 30-year fixed rate was averaging 4.99 percent.
The 15-year fixed-rate mortgage, on the other hand, headed lower, dropping from 4.08 percent a week ago to 4.05 percent (0.8 point) this week. Freddie says if you step back in time 12 months, the 15-year rate was averaging 4.40 percent.
The 5-year adjustable-rate mortgage (ARM) came in at 3.69 percent (0.7 point) in the GSE's latest survey. That's down from 3.72 percent last week and 4.27 percent a year earlier.
Freddie Mac's chief economist, Frank Nothaft, attributes the mixed movement in mortgage rates this week to what he described as ""tame inflation figures.""
""Both the December core producer price index and consumer price index matched the market consensus,"" Nothaft explained. ""Compared to December 2009, core consumer prices rose at a 0.8 percent rate, the smallest yearly increase since records began in 1958.""
[COLUMN_BREAK]Freddie Mac's weekly rate survey is based on data gathered from about 125 lenders across the country. A separate ""study released by Bankrate"":http://www.bankrate.com/finance/mortgages/mortgage-rates-remain-attractively-low.aspx?ic_id=tsThumb1 Thursday, which derives its figures from data provided by the top 10 banks and thrifts in the top 10 U.S. markets, showed similar results.
The benchmark conforming 30-year fixed mortgage rate nosed higher to 4.95 percent (0.4 point) in Bankrate's study. That's up slightly from 4.94 percent last week.
The average 15-year fixed mortgage remained unchanged at 4.29 percent, while the larger jumbo 30-year fixed rate fell for the third week in a row to 5.51 percent. Last week, the 30-year jumbo was 5.57 percent.
Adjustable-rate mortgages were mostly lower in Bankrate's report, with the average 5-year ARM dipping to 3.86 percent and the 7-year ARM falling to 4.19 percent.
Bankrate's analysts say the gap between fixed and adjustable rates has grown significantly in the last six months, making some of the hybrid adjustable rate products a compelling option for borrowers that have ample equity and don't expect to be in the house more than a few years.
""But this strategy isn't without risk, as the rates will eventually begin annual adjustments,"" they noted in the report. ""The inability to sell the home, or a change in circumstances, could throw a wrench into those plans. But a homeowner moving on before the first adjustment enjoys a low fixed rate without the worry of upward movements.""
""Freddie Mac reported"":http://dsnews.comarticles/adjustable-rate-mortgages-expected-to-gain-favor-with-borrowers-report-2011-01-18 earlier this week that ARMs are beginning to gain back some of their lost market share.
After hitting a peak of 40 percent of the home-purchase market share in 2004, ARMs slipped out of favor considerably as delinquencies among homeowners with these loan products began to soar. By early 2009, the ARM share of new home-purchase loans had fallen to just 3 percent. They've been climbing back, though, and Nothaft, says he expects ARMs to claim 9 percent of the market this year.