Homeowners saddled with bad credit mortgages who are looking to refinance as a means to consolidate debt finished up a disappointing week of rate increases with more rate hikes, according to the latest Primary Mortgage MarketSurvey by Freddie Mac.
The survey, which was released last week, found that only 1-year fixed-rate mortgages saw their average rate decrease during the week ending February 25 as it fell by 0.08 percentage points to 4.15 percent. The continued decline dropped the average rate even further away from the 4.81 percent rate it had averaged one year earlier.
After remaining under the 5 percent threshold for the last three weeks, the average rate for 30-year fixed-rate mortgages increased by 0.12 percentage points to hit 5.05 percent for the week. The increase only put the rate slightly below the 5.07 percent average rate documented by Freddie Mac at the same time last year.
The average rate for 15-year FRMs also increased over the course of the week, tacking on 0.07 percentage points to hit 4.4 percent for the week. One year earlier the average rate had averaged 4.68 percent.
"Interest rates for 30-year fixed mortgages followed long-term bond yields higher and rose above 5 percent this week amid a mixed set of economic data reports," explained Frank Nothaft, Freddie Mac’s vice president and chief economist. "For instance, the January producer price index jumped well above the market consensus, but the consumer price index remained subdued and consumer confidence declined to the lowest level since April 2009, according to the Conference Board."