Mortgage rates jumped 17 basis points in the first reported week in December, while coming in at 4.460%. The news comes on the heels of the first couple of weeks of robust holiday shopping and an increase in overall employment, which translates into an increase in consumer confidence. These factors give rise to mortgage rates as with the economy showing signs of steady improvement; more consumers are vying for affordable mortgage money. Another critical factor attributed to a stronger economy is last month’s 25% increase in new home sales. The trend is encouraging and provides solid evidence that a key industry has recovered from the lows of the 2007 housing crisis.
Industry secondary market giant Freddie Mac is the source of the rate data. It is compiled weekly as part of their survey of lenders who sell mortgages to them.
"Fixed mortgage rates increased this week following stronger than expected economic data releases. Private companies added 215,000 new jobs in November according to the ADP employment report, well above the consensus,” Frank Northaft chief economist for Freddie Mac.
While the rate reflects an increase not seen since mid-September the outcome was not a surprise. As a matter of fact because rates are cyclical the increase is within the range of typical rate movement. The biggest concern of consumers is the trend or direction of rate movement. Some ponder if rates in the low 4’s are over? While low rates provide price comfort, many consumers are just as concerned that if rates raise their window of opportunity to purchase a home or refinance their existing mortgage could evaporate or reduce their ability to qualify for a loan.
- 30 Year Fixed 4.46 %
- 15 Year Fixed 3.47 %
- 5/1 ARM 2.99 %
- 1 Year ARM 2.59 %
Complete listing of rates are listed here