Freddie Mac mortgage interest rates inch up this week
Mortgage interest rates inched up again this week but sales of distressed properties continue to hurt home prices and sales remain weak, according to Freddie Mac. The government-sponsored enterprise said its primary mortgage market survey showed the average rate for a 30-year, fixed mortgage rose to 4.86% for the week ending Thursday from 4.81% a week earlier. The average rate for a 15-year, fixed mortgage increased to 4.09% from 4.04 the prior week, according to the Freddie Mac survey. "Fixed mortgage rates rose slightly for a second week in a row, but continue to remain quite low," according to Freddie Mac chief economist Frank Nothaft. "Low rates have benefited from relatively benign inflation reports. Inflation as measured by the 12-month growth in the core price index for consumer spending, a metric preferred by the Federal Reserve, is hovering near the lowest pace since 1960 when this data series began." In March, Nothaft said he expects rates on a traditional 30-year, fixed mortgage to remain below 5% throughout 2011. But distressed property sales and the shadow inventory of foreclosed homes continues to drag the overall housing market down. "Sales of distressed properties continue to place downward pressure on house prices," Nothaft said. "In January, these homes accounted for 37% of existing home sales and rose to 39% in February, based on figures from the National Association of Realtors. House prices were down 3.1% in January from the same month last year according to the S&P/Case-Shiller Home Price Indices." Freddie Mac said the average five-year, adjustable-rate mortgage increased to 3.7% this week from 3.62% a week earlier but is down from 4.1% a year ago. The average rate for a one-year, ARM rose to 3.26% from 3.21% a week ago. The rate is down from 4.05% at this time last year. Write to Jason Philyaw.