The climb has begun. You may recall last week’s edition of the Primary Mortgage Market Survey which reported that after five weeks of declining mortgage rates, some to historically low amounts, rates had started to rise again. This week that trend continues as we see all four rates reported on by the PMMS report have risen. The report shows that this is a reflection of logical economic trends, which makes perfect sense, but I like to suspect other things at work. Witchcraft? Aliens living inside our stock market? A tear in the fabric of the space time continuum? Signs point towards falling household debt and more consumer spending, but I’ll cling to my conspiracy theories as long as I can. Regardless of what fan fiction you read, no one can doubt the raw numbers straight from Freddie Mac:
30-year fixed-rate mortgage (FRM) averaged 3.51% with an average 0.7 point for the week ending May 16, 2013, up from last week when it averaged 3.42%. Last year at this time, the 30-year FRM averaged 3.79%.
15-year fixed-rate mortgage this week averaged 2.69% with an average 0.7 point, up from last week when it averaged 2.61%. A year ago at this time, the 15-year FRM averaged 3.04%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.62% this week with an average 0.5 point, up from last week when it averaged 2.58%. A year ago, the 5-year ARM averaged 2.83%.
1-year Treasury-indexed adjustable-rate mortgage averaged 2.55% this week with an average 0.4 point, up from last week when it averaged 2.53%. At this time last year, the 1-year ARM averaged 2.78%.
You don’t have to believe me! I know the truth. There are plenty of supernatural enthusiasts that will support my theories, like Bigfoot caused the recession, and the Bermuda Triangle influences the Dow Jones Industrial Average. Don’t believe my obnoxious and unfounded theories? Read these two quotes from Frank Nothaft, vice president and chief economist of Freddie Mac:
“Mortgage rates followed U.S. Treasury bond yields higher this week on signs of stronger consumer spending. Advanced retail sales rose 0.1% in April, above the market forecast consensus of a 0.3% decline. Excluding such items as automobiles and gasoline, sales were up 0.5% for the second time in three months.
“Households are also shoring up their balance sheets. Total household debt fell by about $110 billion in the first quarter. In addition, approximately 3.0 million homeowners were seriously delinquent (90 days or more delinquent or in foreclosure) on their first mortgages, down from a peak of about 5.1 million in the fourth quarter of 2009.”
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