Mortgage rates have seen their sixth consecutive week of rises as the average rate edges closer to 4%.
Data released today by Freddie Mac shows yet another week of fixed mortgage rates climbing higher. Freddie Mac said the trend of rising rates over the past month has seen the average 30-year fixed-rate mortgage increase by more than half a percentage point.
The rise brings rates ever closer to the 4% threshold. The average 30-year fixed-rate climbed 0.07% for the week to 3.98%
Freddie Mac vice president and chief economist Frank Nothaft put the continuing rise down to strong economic data over the week.
"Fixed mortgage rates crept up further this week following a solid employment report for May. The economy added 175,000 new jobs and the number of discouraged workers fell by 780,000 to the fewest since September 2009. And although the unemployment rate ticked up to 7.6 percent, it was due to a 420,000 increase in the size of the labor force; the underemployment rate fell from 13.9 to 13.8 percent in May," he said.
As fixed rates continue their rise, Nothaft said more borrowers are eschewing fixed mortgage rates.
"With the ongoing run up in fixed mortgage rates, adjustable-rate mortgages (ARMs) are becoming more popular among homeowners looking to refinance and for home purchasers. The 30-year fixed mortgage rate this week is 0.6 percentage points above the recent low set over the week ending May 2nd. In comparison, the share of conventional mortgage applications for ARMs rose from 13 percent of dollar volume at the beginning of May to 17 percent last week, according to the Mortgage Bankers Association."