Fixed mortgage rates moved higher for the first time in three weeks amid positive economic data out of the manufacturing and non-manufacturing sectors.
Additionally, the U.S. expanded by an annual pace of 2.8% in the third quarter, which is the biggest increased in a year as a result of a large buildup in business inventories and trade improvement, according to the government.
Market participants are confident that the economy will continue to improve into 2014, fueling a rising in rates.
For instance, nearly 46% of corporate directors expect better economic conditions a year from now, according to the National Association of Corporate Directors.
The 30-year, fixed-rate mortgage came in at 4.16%, up from 4.10% last week, and also up from 3.40% last year, Freddie Mac said in its Primary Mortgage Market Survey.
“Production in the manufacturing industry expanded for the fifth month in a row in October to the strongest pace since April 2011,” said Freddie Mac vice president and chief economist Frank Nothaft.
He said, “Similarly, the non-manufacturing sector grew for the second consecutive month in October and beat the market consensus forecast of a decline. These increases were widespread across the nation, from Chicago to Milwaukee to New York.”
The 15-year, FRM increased 3.27%, up from 3.20% last week and a steep rebound from 2.69% last year.
Meanwhile, the 5-year Treasury-index adjustable-rate mortgage averaged 2.96%, unchanged from last week, but an increase from 2.73% a year ago.
Additionally, the 1-year Treasury-index ARM came in at 2.61%, dropping from 2.64% last week, but up from 2.59% a year earlier.
Mortgage rates moved higher this week as the post-government freeze clouds have begun to lift, Bankrate.com noted.
Consequently, this is enough to lift yields on long-term government bonds and mortgage rates, leading into this week’s job’s report.
Bankrate’s 30-year FRM rose to 4.35% from 4.27% a week earlier.
Additionally, the 15-year, FRM increased to 3.42%, up from 3.38%, while the 5/1 ARM dropped to 3.25%, down from 3.26%.
