Interest rates for the most popular types of mortgages moved upward this week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by seven basis points (0.07 percent) to 4.23 percent. Conforming 5/1 Hybrid ARM rates increased by eight basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.14 percent.
"For much of the spring, mortgage rates have defied normal convention as they declined in the face of a strengthening economy," said Keith Gumbinger, vice president of HSH.com. "However, the steady accumulation of firmer economic data has put a halt to the decline, and we may be reversing course slightly."
A solid employment report for May capped a week in which reports covering both the factory and service-business sides of the economy pointed to a steady-to-strengthening pattern for the economy.
Rising growth and demand for credit can firm interest rates, as can concerns about inflation. These factors remain moderate at best, but acceleration seems more likely than decline in the near future.
"The economy is still plodding, and inflation isn't yet a concern and may not be for a while yet," adds Gumbinger. "Investors though must look further out than just a month or two and adjust their expectations accordingly. If economic prospects and expectations for inflation are starting to look up over the longer horizon, even just a little, interest rates will firm to at least some degree."
Average mortgage rates and points for conforming residential mortgages for the week ending June 10, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.23 percent
►Average points: 0.17
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.14 percent
►Average points: 0.08
Average mortgage rates and points for conforming residential mortgages for the previous week ending June 3 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.16 percent
►Average points: 0.16
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.06 percent
►Average points: 0.07
