The interest rate for a 30-year mortgage rose for the week ending Nov. 14, signaling that consumers are likely getting over their recession fears, according to Freddie Mac.
The results of Freddie Mac’s Primary Mortgage Market Survey revealed that the 30-year fixed-rate mortgage (FRM) climbed to 3.75% from the prior week’s 3.69%. Despite the increase, the 30-year FRM is still more than a percentage point below last year’s 4.94%.
“The modest uptick in mortgage rates over the last two months reflects declining recession fears and a more sanguine outlook for the global economy,” said Sam Khater, Freddie Mac’s chief economist. “Due to the improved economic outlook, purchase mortgage applications rose 15% over the same week a year ago, the second-highest weekly increase in the last two years.”
The 15-year FRM soared to 3.2%, up from the week before when it averaged 3.13%, but lower than last year’s 4.36%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) went up from 3.39% to 3.44%. A year ago at this time, the 5-year ARM was 4.14%.
“Given the important role residential real estate plays in the economy, the steady improvement of the housing market is a reassuring sign that the economy is on solid ground heading into next year,” Khater said.