Mortgage rates rise for the week of July 8, 2013

Posted by  on Jul 15, 2013

Expectations that the Federal Reserve will being tapering purchases of bonds and mortgage-backed securities have led to market and mortgage rate volatility in recent weeks.

Mortgage rates continue their upward tick

According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 15 basis points (0.15 percent) to 4.70 percent, the highest level since July 2011. Average rates for 15-year fixed-rate mortgage loans jumped by 11 basis points (0.11 percent) to 3.77 percent. FHA-insured, 30-year fixed-rate home loan rates also rose by 18 basis points (0.18 percent) to an average rate of 4.38 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), also increased last week, rising 12 basis points (0.12 percent) to an average rate of 3.47 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.

Economy is growing slowly

The Federal Reserve has stated that the decision to end their purchases will be based on economic data, particularly a lower unemployment rate and higher inflation. As the experts at HSH.com point out, a solid jobs report tends to drive mortgage rates immediately higher, yet it takes multiple reports of softer economic data to push them back down. In general, the U.S. economy seems to be growing, albeit slowly, and market indicators have yet to demonstrate the impact of higher mortgage rates. Mortgage applications for refinances and purchases have fallen as rates have risen, but it will take at least a month before additional data is released on home sales.

This week's data includes reports from the National Association of Home Builders, the Federal Reserve's regional surveys of economic conditions, Leading Economic Indicators and more.

The mortgage experts at HSH.com anticipate that mortgage rates will fall slightly, perhaps by 5 basis points, but this could change according to the new data released as the week passes.

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