Mortgages lifted due to hints of positive news in the real estate market

Mortgage rates rose this week as some positive economic data in the United States eased investors' worries.

30 year fixed rate mortgage – 3 month trend

The benchmark 30-year fixed-rate mortgage rose to 3.86 percent from 3.81 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index stood at 4.45 percent; four weeks ago, it was 3.78 percent.
The benchmark 15-year fixed-rate mortgage rose to 3.05 percent from 3 percent. The benchmark 5/1 adjustable-rate mortgage rose to 2.93 from 2.91 percent.

Weekly national mortgage survey

Results of Bankrate.com's Aug. 15, 2012, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

	30-year fixed	15-year fixed	5-year ARM
This week's rate:	3.86%	3.05%	2.93%
Change from last week:	+0.05	+0.05	+0.02
Monthly payment:	$774.48	$1,143.43	$689.43
Change from last week:	+$4.71	+$3.97	+$1.77

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Rates have been on the rise for three weeks in Bankrate's survey, but mortgage analysts say the upward trend won't last long.

Consumers help lift the economy and rates

One of the factors that helped push rates up this week was the release of a better-than-expected U.S. retail sales report that showed improvement in consumer spending for the first time in four months.
The Commerce Department says retail sales rose 0.8 percent in July, compared to the previous month. That's much better than economists had expected after sales had declined for three months in a row, including a 0.7 percent drop in June. Consumer spending is considered a key economic indicator because it accounts for more than 70 percent of U.S. economic activity.
When those types of numbers come out, the stock market seems to do well and that's not good for rates, according to Americana Mortgage in Manhasset, N.Y.
That's because when investors become more confident about the economy, there's less demand for safe investments such as U.S. Treasury and mortgage bonds. The trend normally results in higher bond yields, which translates into higher mortgage rates.
Adding to the optimism, the National Association of Home Builders said Wednesday that builder confidence increased for a fourth consecutive month in August, according to survey conducted by the association.