Mortgage rates rise as outlook brightens

Friday, May 8, 2009

Freddie Mac: Mortgage rates rise as outlook brightens

Triangle Business Journal

Mortgage rates remain near historic lows, but rates ticked up a bit this week, a move Freddie Mac links to the improving outlook for the U.S. economy.

The average rate on a 30-year fixed-rate mortgage rose to 4.84 percent this week, up from last week's 4.78 percent, which tied for the lowest rate for a 30-year mortgage since Freddie Mac started keeping track in 1971. A year ago, 30 year fixed-rate mortgages averaged 6.05 percent.

A one-year, adjustable-rate mortgage rose a fraction to an average 4.78 percent.

"Mortgage rates rose slightly this week amid positive economic news that the economy may be approaching the bottom of the recession, says Freddie Mac (NYSE: FRE) chief economist Frank Nothaft. "In terms of the household sector, the final April estimate of consumer sentiment, as measured by the University of Michigan, was revised above the market consensus."

Federal Reserve Board chairman Ben Bernanke testified on Capitol Hill this week that the Fed believes economic activity will begin to recover later this year. Benanke also said the Fed sees signs the housing market is stablizing.

Those signs include a report this week from the National Association of Realtors that pending sales of existing homes rose in March after rising in February, the first back-to-back increase in pending home sales in a year.