Mortgage rates rose last week with average rates for a 30-year fixed rate mortgage rising from last week’s 3.35 percent to 3.42 percent with buyers paying all closing costs and 0.7 percent in discount points.
Average rates for a 15-year, fixed-rate mortgage rose from 2.56 percent to 2.61 percent with buyers paying their closing costs and 0.7 percent in discount points.
Freddie Mac also reports that average mortgage rates for a 5/1 adjustable rate mortgage rose from 2.56 percent last week to 2.58 percent with buyers paying their closing costs and 0.5 percent in discount points.
Summary from last week’s economic news about mortgage rates
Monday: In spite of improving economic conditions, a majority of participants in the Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that their lending institutions would not be relaxing residential mortgage lending standards. Lenders perceive a significant risk in terms of being required to absorb losses incurred on defaulted mortgage loans.
Mortgage owners including Fannie Mae and Freddie Mac, along with mortgage insurance companies can require mortgage lenders to buy back defaulted loans or make them whole for losses related to foreclosed and otherwise defaulted mortgage loans.
Tuesday: CoreLogic reported an increase of 1.9 percent in national home prices for March. This news represents the 13th consecutive increase and a year-over-year increase of 10.5 percent.
Home prices were boosted by strong increases in the West; Nevada posted a 22.2 percent gain from last March and California posted a 17.2 percent year-over-year gain.
CoreLogic predicted a year-over-year increase of 9.6 percent for home prices for April, with a monthly increase of 1.3 percent increase expected between March and April.
Thursday: Weekly jobless claims brought good news as they came in at 323,000; this was lower than expectations of 335,000 new jobless claims and the 327,000 new jobless claims reported in the prior week.
Friday: The Treasury Department reported that the federal budget has a surplus of + $113 billion for April. This was $54 billion higher than for April 2012 and the highest monthly surplus since April, 2008.
Increasing home values and federal budget surpluses, along with falling consumer debt pointed the way toward overall as well as personal economic recovery last week.
Looking Ahead
This week brings a couple of important economic reports affecting the real estate industry including the Home Builders Index on Wednesday and the Weekly Jobless Claims and Housing Starts numbers released on Thursday.
The Consumer Sentiment and Leading Indicators reports will round out the week on Friday. Consumer Sentiment is important in terms of housing markets and mortgage lending; consumers typically don’t buy homes or move up to a larger home if they aren’t feeling secure about economic conditions.
This week’s economic data may provide further evidence of a stronger U.S. economy as well as a snapshot of retail spending and consumer costs.
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