Home buyers and refinancers waiting and hoping for a return of record low rates suffered a setback last week as fixed rates reversed a three-week downward trend.

According to data from Freddie Mac’s Primary Mortgage Market Survey released this morning, the 30-year fixed-rate mortgage (FRM) rose to 5.20 percent with borrowers paying 0.70 points for the week ending July 23.  Last week the average was 5.14 percent with 0.7 point.

The 15-year FRM increased from 4.63 percent to 4.68 percent this week.  Fees and points were unchanged at 0.7 point.

One-year Treasury-indexed adjustable rate mortgages (ARMs) inched up a single basis point to 4.77 percent with fees and points also increasing from 0.5 point to 0.6 point.

Five-year Treasury-indexed hybrid ARMs were the sole exception to the increases, dropping from 4.83 percent to 4.74 percent with fees and points unchanged at 0.7 point.

According to Frank Nothaft, Freddie Mac vice president and chief economist, “Mortgage interest rates were mixed this past week with fixed-rate loans averaging somewhat higher while initial rates on ARMs were flat-to-down slightly.  Federal Reserve Chairman Bernanke, during his July 22 Senate testimony, noted that mortgage rates are lower than they were last fall, in part because of the Federal Reserve's actions, and housing affordability right now is the highest its been in many years.

“Newly released housing indicators contain positive signs that the worst may be behind us. Home prices were down 5.6 percent between May 2008 and May 2009, the smallest 12-month decline since June 2008, based on the Federal Housing Finance Agency’s monthly House Price Index. New construction of one-family homes jumped 14.4 percent in June to an annualized pace of 470,000 units, the most since October 2008, according to the Commerce Department. In addition, the National Association of Home Builders reported that homebuilders' assessments of market conditions in July and for the remainder of this year strengthened to a 10-month high.”

On July 20 Fannie Mae released information on its weekly yields for the period ended July 17. 

Conventional 30-year FRMs had an average yield of 4.96 percent compared to 4.79 percent a week earlier.  Conventional 15-year FRMs also increased, rising from 4.22 percent to 4.31 percent.

Government guaranteed FHA and VA loans were up from 5.51 percent to 5.67 percent.  The one-year ARM rose from 2.99 percent to 3.05 percent.

Fannie Mae yields are quoted net of servicing fees.

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