People from around the globe shared New Year’s cheer as they brought in 2014. On the first weekly mortgage survey of the year U.S. consumers were greeted with a rise in rates. The news was not a surprise and the increase was only 5 basis points week over week. Ending 2013 at 4.480%, today’s rate survey for the benchmark 30 Year Fixed Rate mortgage is 4.530%. The popular 15 Year Fixed Rate mortgage also received a bump. It increased 3 basis points from 3.520% to 3.55%
Signs of positive economic growth are attributed to the increase. A looming issue awaiting political leaders who will be returning from their holiday break will be whether they tackle the long-term unemployment. This population was cut off just after Christmas as their benefits expired. Many argue that by not addressing this issue will throw a roadblock into a recovering economy. Studies have shown unemployment benefits boast the economy because recipient’s immediately use them for goods and services. On the other hand, those in opposition see them as some type of government largess that only hampers people from aggressively seeking employment because by not having the benefits removes the safety net from those who rely on the insurance.
"Mortgage rates edged up to begin the year on signs of a stronger economic recovery. The pending home sales index inched up 0.2 percent in November, after five consecutive months of decline. The Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller® 20-city composite house price index [PDF] rose 13.6 percent over the 12-months ending in October 2013." Frank Nothaft, vice president and chief economist, Freddie Mac
The rate survey is an industry standard used by consumers and others who follow mortgage rate activity. Freddie Mac buys mortgages from lenders; such as banks, credit unions, mortgage bankers and others who originate mortgages from local consumers. They are surveyed weekly to indicate what rates they are charging consumers. The data is averaged and compiled into the weekly survey.