Mortgage Giant, Freddie Mac released this weeks Prime Mortgage Market Survey (PMMS) showing the average mortgage rates on a fixed rate mortgage have increased four consecutive weeks.
The survey reveals the following:
30-year fixed-rate mortgage (FRM) averaged 4.22 percent with an average 0.5 point for the week ending December 15, 2016, showing a .07% rise from last week.
15-year FRM this week averaged 3.68 percent with an average 0.5 point, showing a .06% rise from last week.
5/1-year ARM averaged 3.53 percent this week with an average 0.4 point, up .01% from last week.
According to Mortgage News Daily this jump is only the beginning, after yesterday's bond market movement the mortgage rates will likely increase another .05% - .06%. Investors are concerned about several things at this time. Some are concerned about rising growth and inflation, while other investors are concerned with getting ahead of investors that are concerned with rising growth and inflation, thus pushing rates even higher. In some cases, central banks are purchasing fewer bonds. When you lessen the demand for bonds, the price of the bonds reduce which creates higher rates.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One-point equals 1 percent of the loan amount.