Mortgage rates in the U.S. went up for the week ended October 30, 2014 rebounding from the record low it reached last week, according to Freddie Mac's weekly Primary Mortgage Market Survey.
The average 30-year-fixed mortgage rates increased to 3.98 percent from last week's 3.92 percent. The rate was 4.10 percent at the same time, last year.
The average 15-year-fixed mortgage rates also spiked to 3.13 percent from last week's 3.08 percent. It averaged 3.20 percent at the same time, last year.
The five-year treasury-indexed hybrid adjustable mortgage rate improved to 2.94 percent from last week's 2.91 percent. The rate was 2.96 percent a year ago.
The average one-year treasury-indexed adjustable mortgage rate also inched up slightly to 2.43 percent this week from last week's 2.41 percent. The rates averaged 2.51 percent at the same time last year.
Positive housing market reports fuelled the improvement in rates.
"Mortgage rates grew across the board this week, rebounding from the lowest rates of the year. New home sales grew at an annual rate of 467,000 sales in September, the fastest rate observed during the recovery. Meanwhile, the National S&P Case-Shiller House Price Index grew at a seasonally adjusted annual rate of 0.4 percent in August," Frank Nothaft, chief economist at Freddie Mac, said in a statement.
Other experts believe rates would spike in the coming few months as the Federal reserve finally ended its bond-buying scheme recently and are now urging people to lock down on low rates before a major spike.
"Fed says fed funds rate to remain low for considerable time period. Fed sees labor market improvement. It's official. The Fed ends QE3. I see rates finally starting to climb toward the upper 4s by the end of the year ... unless the rumors QE4 start to ramp up. Lock your rates if you can," Shaun Guerrero, sales manager for Fairway Independent Mortgage, told realtor.com.
Mortgage applications fell this week when compared to a week ago, but are still up when compared to a year ago. The refinancing index was down 17 percent, while the purchase index was down 5 percent.
"Borrowers with jumbo loans tend to be most sensitive to changes in rates, and that sensitivity has been clearly apparent in the past few weeks with double and even triple digit percentage changes in refinance application volume for jumbo loans," Mike Fratantoni, the chief economist at the Mortgage banking Association, explained about the decline in the applications index.
All market conditions indicate towards a great home-buying time. Rates are low, prices are appreciating at a slower pace and supply has been steadying as well. Lending standards are also loosening up, so this makes for an ideal home buying environment.
