While everyone wants the American economy and the global economy to improve, mortgage borrowers are likely to bear the burden of higher interest rates once the economy begins to grow at a steadier pace. Mortgage rates rose last week, but they still remain near historic record lows.
Mortgage rates react
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 18 basis points (0.18 percent) to 4.01 percent, the first time HSH.com has reported an average rate for this product above 4 percent since June 1, 2012. Average rates for 15-year fixed-rate mortgage loans rose by 16 basis points (0.16 percent) to 3.21 percent. FHA-insured, 30-year fixed-rate home loan rates also rose by 18 basis points (0.18 percent) to an average rate of 3.36 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) rose just 7 basis points (0.07 percent) to 2.70 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Economic news still jittery
Consumer confidence indicators have been rising in recent months, possibly because of improving employment reports, yet for the week ending May 25, about 354,000 new applications for unemployment benefits were filed. In addition, both consumer income and retail spending have been relatively sluggish with just a 2.8 percent annual rate.
The second review of first quarter 2013 GDP produced a slight downward revision to 2.4 percent growth for the quarter.
On Friday, May 31, the stock market plunged more than 200 points, so it's hard to say whether mortgage rates will rise again this week as expected or if they will plunge again. It all depends on the daily economic news from around the globe.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.