Mortgage Rates Surge In First Week of 2014
Taking a look at Freddie Mac’s weekly Primary Market Survey, the 30-year fixed-rate averaged 4.53% in the week ending January 2, which is up from 4.48% in the last week of December. Just a year ago the 30-year fixed-rate mortgage was at 3.34 percent.
Both the Treasury-indexed hybrid adjustable-rate mortgage (ARM) and the 15-year FRM also increased, averaging 3.05 and 3.55 percent, respectively. The only rate to not increase was the 1-year ARM which remained flat at 2.56 percent.
So, why the increases?
There are 3 major factors behind this week’s increases according to Frank Nothaft, VP and chief economist for Freddie Mac:
- Rising consumer confidence as reported by the Conference Board
- A strong showing for home prices in the most recent S&P/Case-Shiller Indices
- A slight gain in pending home sales for November
All of these factors, Nothaft notes, serve as “signs of a stronger economic recovery.”
Finance site Bankrate.com notes, “Mortgage rates finished 2014 more than a full percentage point higher than where they began. While mortgage rates are still below September’s high point of the year, they did finish 2013 near the upper end of this year’s range.”
Let’s see if 2014 continues to see a steady increase in rates as the market continues to recover.