Mortgage rates reversed course this week, with averages on
fixed-rate mortgages posting their first increases in six weeks,
according to the weekly
Average interest rates on standard 30-year fixed-rate loans rose
by six basis points, up to 3.55 percent, compared to their record
low of 3.49 percent last week. Averages on 15-year fixed-rate
mortgages also came off their record lows, increased to 2.83
percent from last week's mark of 2.80 percent.
A smaller increase was seen on initial rates for 5-year
adjustable-rate mortgages (ARMs), which rose to an average of 2.75
percent, up from 2.74 percent previously.
Upturn linked to positive Euro news
Rates headed upward following news of additional debt relief for
financially stressed nations in the Eurozone, lessening the
likelihood that the debt crisis there will drag down the recovering
U.S. economy along with it.
Other economic signs were more mixed, however. Standard &
Poor's reported that U.S. home prices rose for a fourth consecutive
month in May, with nearly all cities in the 20-city survey showing
gains. At the same time, the National Association of Realtors
reported that contracts signed for pending home sales fell in June,
following a previously announced drop in actual home sales for the
Consumers upbeat despite slowdown
Those reports came amid news that the U.S. economy appears to be
slowing, with the gross domestic product (GDP) increasing at an
anemic annual rate of 1.5 percent in the second quarter of the
year, following 2.0 percent growth in the first. Even so, consumer
confidence rose in July for the first time in five months,
according to the monthly survey from the Conference Board.
Mortgage rates typically rise on good economic news and fall on
bad, since increased demand for capital tends to drive up the cost
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