Housing Market

December mortgage rates climb upward amid rising consumer confidence

mortgage rateData released by Freddie Mac on Thursday showed average mortgage rates continued their upward climb into the new year as consumer confidence rebounded from its November decline.

“Mortgage rates edged up to begin the year on signs of a stronger economic recovery,” Freddie Mac Chief Economist Frank Nothaft said. “The pending home sales index inched up 0.2 percent in November, after five consecutive months of decline.”

The 30-year fixed-rate mortgage rose to 4.53 percent for the week ending Jan. 2, from 4.48 percent the week prior. The 15-year mortgage rose from 3.52 percent to 3.55 percent this week.

The five-year adjustable-rate mortgage averaged 3.05 percent this week, compared to three percent the previous week. The one-year ARM remained unchanged at 2.56 percent.

According to The Conference Board, the Consumer Confidence Index is now near pre-government shutdown levels. Consumer sentiment towards current economic conditions rose to the highest in nearly six years in December, with consumers attributing improving labor market and economic conditions.

The percentage of consumers expecting business conditions to improve increased to 17.2 percent from 16.7 percent in November, and those expecting conditions to worsen fell from 14 percent to 16.1 percent.

“Looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects,” Lynn Franco, the director of economic indicators at The Conference Board, said. “Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began.”

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