Mortgage Rates Continue Their Ascent as Worries Grow

Fixed mortgage rates continued their uphill climb following promising housing gains in July, but the upward trend might be short-lived.

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According to ""Freddie Mac's"":http://www.freddiemac.com/ weekly Primary Mortgage Market Survey (PMMS), the 30-year fixed rate mortgage averaged 3.66 percent (0.7 point) for the week ending August 23, up from 3.62 percent the previous week.

The 15-year FRM also slid up, averaging 2.89 percent (0.6 point). A week ago, the 15-year fixed averaged 2.88 percent.

Meanwhile, the 5-year adjustable-rate mortgage averaged 2.80

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percent (0.6 point), up from 2.76 percent in the last survey.

The 1-year ARM fell a bit, averaging 2.66 percent (0.4 point), down from 2.69 percent before.

Increases in fixed mortgage rates seemed to be spurred by reports from the Census Bureau and the National Association of Realtors showing gains in residential building permits and existing home sales and prices for the month of July.

""Bankrate.com's"":http://www.bankrate.com/ weekly survey showed fairly large fixed-rate increases, with the 30-year averaging 3.91 percent (up from 3.86 percent) and the 15-year averaging 3.12 percent (from 3.05 percent). Meanwhile, the 5/1 ARM slid down to 2.90 percent from 2.93 percent the week before.

Bankrate.com attributed the gains to the country's recent small economic victories but warned the upward trend may not last.

""The eerie quietness on the European debt front, the better tone of U.S. economic data, and the rallying stock market have combined to lead bond yields and mortgage rates higher,"" the company said in a release. ""But the European debt crisis hasn't been resolved, and the economy is not strong enough to put all our worries to rest, particularly with the fiscal cliff looming, so don't expect mortgage rates to continue moving higher.

""In fact, one hiccup and we could well see mortgage rates heading back down,"" the site added.