Mortgage rates rose for the second consecutive week, according to Freddie Mac’s Primary Mortgage Market Survey.
The average rate on a 30-year fixed rate mortgage increased from 4.81 percent to 4.86 percent. The fifteen-year fixed-rate mortgage ticked up 5 basis points to 4.09%. The rate on 5/1 adjustable rate mortgages increased from 3.62 percent to 3.70 percent, and 1 year ARMs increased from 3.21 percent to 3.26 percent.
The rise in rates is likely a response to the rallying stock market, as the DOW, NASDAQ, and S&P 500 are all up substantially after diving in the aftermath of the Japanese earthquake. As money has flowed from the bond markets into the stock markets, bond yields have increased, brining mortgage rates with them.
Thirty-year fixed rates have been bouncing around between 4.70 percent and 5.05 percent for most of the last three months, see-sawing in response to various political and economic events. Although there is no clear long-term trend at this time, Many predict that rates will hit 5.5 by the end of 2011.
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