Placed in Market Update
It was bound to happen—an increase in rates after several record breaking lows. For the week ending May 25, the overall average rate for 30-year fixed-rate mortgages increased by .01%, to 4.06%. The 15-year fixed-rate rose slightly by .02% to an average 3.32%. However, FHA-backed 30-year mortgages decreased by another .05% from the previous record to 3.70%, while the overall average rate for 5/1 Hybrid ARMs had a small jump to an average of 2.94%, a .02% increase.
There has been an economic bright spot or two in the last month. For example, the Chicago Federal Reserve’s National Activity Index (a combination of 85 different economic indicators that reflect whether the economy is growing above or below its natural trend) rose from a minus 0.44 in March to a positive 0.11 in April. That is considered a moderately above-trend level. In addition, the Thomson Reuters/University of Michigan index of sentiment reported that consumer confidence increased in May to 79.3, the highest level since October 2007. The jump is largely attributed to Americans’ positive attitude about employment prospects.