Editor’s note: This story has been corrected to note that mortgage rates hit record lows during the week ending Nov. 11.
Rates on fixed-rate loans were up for the 5th week in a row as new signs of economic growth prompted investors to continue moving out of bonds and securities that fund most mortgage loans, Freddie Mac said in releasing its weekly Primary Mortgage Market Survey.
Rates for 30-year fixed-rate mortgages averaged 4.83 percent with an average of 0.7 point for the week ending Dec. 16, up from 4.61 percent last week but still below the 4.94 percent rate this time a year ago, Freddie Mac said.
Interest rates for 30-year fixed mortgages are now at their highest level since May, and more than a half percentage point higher than the record low of 4.17 percent set during the week ending Nov. 11.
"Market concerns over stronger economic growth that, in the near term, could lead to an increase in inflation have sparked a rise in bond yields, and mortgage rates have followed," said Freddie Mac Chief Economist Frank Nothaft.
Growth in retail sales in November, excluding automobiles, was twice the consensus forecast, Nothaft noted, and industrial production showed the biggest gain since July. Consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, rose to a six-month high in December.
Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association, said the likelihood that Congress will sign off on a two-year extension of Bush-era tax cuts is also boosting growth prospects.
Freddie Mac reported that rates on 15-year fixed-rate mortgages averaged 4.17 percent with an average 0.7 point, up from 3.96 percent last week but down from 4.38 percent a year ago.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.77 percent this week, with an average 0.7 point, up from 3.6 percent last week but down from 4.37 percent a year ago.
The 1-year Treasury-indexed ARM averaged 3.35 percent this week with an average 0.7 point, up from 3.27 percent last week but still well below the 4.34 percent registered the same time a year ago.
In a separate survey, the Mortgage Bankers Association said applications for purchase loans sagged a seasonally adjusted 5 percent for the week ending Dec. 10 when compared to the week before, and were down 16.6 percent from the same time a year ago.
Demand for refinancings also fell for the fifth week in a row, declining 0.7 percent from the previous week.