RealEstateEconomyWatch.com

After hitting historic lows three weeks ago, mortgage rates rose above 5 percent this week and may continue to increase as the clock ticks down on the Federal Reserve’s efforts to keep rates low.

Freddie Mac said today rates on a 30-year fixed loan rose to 5.05 percent, up from 4.94 percent a week ago and topping 5 percent for the first time since October 29.  Bankrate.com reported the average conforming 30-year fixed mortgage rose for the fourth straight week, to 5.24 percent. The average 30-year fixed mortgage has an average of 0.45 discount and origination points.

On Zillow’s Mortgage Marketplace, the weekly average rate that borrowers were quoted for 30-year fixed mortgages increased five basis points last week to 4.77 percent, up from 4.72 percent the week prior, according to the Zillow Mortgage Rate Monitor.  Rates for 15-year fixed mortgages rose three basis points to 4.24 percent from 4.21 percent, and 5-1 adjustable rate mortgages increased four basis points to 3.85 percent, from 3.81 percent the week prior.

The volume of mortgage requests last week fell 16 percent from the prior week. Of last week’s requests, 42 percent were for refinance loans, 55 percent were for purchase loans and 2 percent were for home equity loans. The prior week, 45 percent of requests were for refinance loans, 53 percent were for purchase loans and 2 percent were for home equity loans.

Adjustable-rate mortgages rose as well, but only slightly, in Freddie Mac’s survey. The five-year Treasury-indexed hybrid ARM averaged 4.40 percent, up from 4.37 percent. The hybrid was at 5.49 percent a year ago. One-year Treasury-indexed ARMS averaged 4.38 percent, up from 4.34 percent. Last year at this time the ARM was at 4.95 percent.

“Although interest rates for 30-year fixed-rate mortgages are above 5 perdcent this week for the first time since the end of October, they are still around 0.5 percentage points below this year’s peak set in mid-June,” said Frank Nothaft, Freddie Mac chief economist. “ARM rates increased by a lesser amount as the market consensus calls for no rate hikes by the Federal Reserve in the immediate future.”

The steady rise in mortgage rates comes as the clock begins to tick down on the Federal Reserve’s $1.25 trillion program to keep rates low by buying up mortgage-backed securities on the open market.  With three months remaining before the April 30 termination of the program, the Fed has spent $1.07 trillion and has about $150 billion left to spend in the next three months.