Fixed mortgage rates rose this week on economic reports that were better than what forecasts had expected, according to Frank Nothaft, Freddie Mac's chief economist.
"The economy slowed by 3.8% in the fourth quarter of 2008, less than the market consensus, with inflationary pressures held at bay. Meanwhile, personal incomes fell by only half as much as some market forecasters predicted," Mr. Nothaft said Thursday in a press release.
In the week that ended Feb. 5, the average rate for a 30-year fixed-rate mortgage grew 15 basis points from a week earlier but fell 42 basis points from a year earlier, to 5.25%, according to Freddie's weekly survey of conforming mortgage rates.
Just three weeks ago the average was a little under 5%.
The average rate for a 15-year fixed-rate mortgage, a popular choice for refinancing, rose 12 basis points from a week earlier but fell 23 basis points from a year earlier, to 4.92%.
For one-year Treasury-indexed adjustable-rate mortgages, the average rate rose 2 basis points from a week earlier but fell 11 basis points from a year earlier, to 4.92%.
Only five-year ARMs headed in the other direction; the average rate fell 1 basis point from a week earlier but rose 5 basis points from a year earlier, to 5.26%.
To obtain the rates, the fixed-rate mortgages required an average payment of 0.8 points, the five-year ARM required an average payment of 0.6 points, and the one-year ARM required an average payment of 0.5 points, Freddie said.
(A "point" is 1% of the mortgage amount, charged as prepaid interest.)
According to Mr. Nothaft, low interest rates and falling home prices have made housing more affordable than it has been in 19 years.
