Interest rates on home loans headed higher this week, marking the fourth consecutive increase recorded. Still, rates remain extremely low by historical standards â€" a selling point market players hope will buoy activity as we move into the spring home buying season.
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""Freddie Mac"":http://www.freddiemac.com reports that rates on 30-year fixed mortgages averaged 4.91 percent (0.6 point) for the week ending April 14, 2011. That's up from last week's average of 4.87 percent. Last year at this time, the 30-year rate was 5.07 percent.
Frank Nothaft, VP and chief economist at Freddie Mac, commented, ""Mortgage rates edged up following a light week of economic data releases. Although rates on 30-year fixed mortgages have risen four weeks in a row, they have remained below 5 percent for eight straight weeks now, helping to maintain affordability in the housing market.""
[COLUMN_BREAK]""Freddie Mac's weekly survey"":http://www.freddiemac.com/pmms/ calculates the average rate from data reported by about 125 lenders across the country
The GSE's latest study shows that the 15-year fixed-rate mortgage is also slowly increasing. Freddie pegs the 15-year rate at 4.13 percent (0.7 point) this week, up from last week's average of 4.10 percent. A year ago at this time, the 15-year rate was 4.40 percent.
Adjustable-rate mortgage (ARMs) also edged up. The 5-year ARM rose from 3.72 percent last week to 3.78 percent (0.6 point) this week. It was 4.08 percent this time last year.
One-year ARM rates are now averaging 3.25 percent (0.6 point), up slightly from 3.22 percent last week. This time last year, the 1-year ARM averaged 4.13 percent.
Looking at the larger macro-economic indicators, Nothaft said, [C]onsumer purchases of retail goods rose for the ninth consecutive month in March, suggesting families have an increasing capacity to spend, which bodes well for the economic recovery.""
Nothaft continued, ""Reinforcing this notion, the Federal Reserve reported in its April 13th regional economic review that consumer spending picked up modestly in February and March across most districts. In addition, it noted that economic activity generally continued to improve and that reports focusing on the near-term outlook were most often upbeat.""