Mortgage Rates Rise After Scraping 16-Month Low

After touching their lowest levels in more than a year, fixed mortgage rates came up across the board this week, according to market data.

Freddie Mac reported Thursday that the average interest rate for a 30-year fixed-rate mortgage (FRM) was 3.98 percent (0.5 point) for the week ending October 30, up from last week's 16-month low of 3.92 percent. A year ago, the 30-year FRM averaged 4.10 percent.

The 15-year FRM averaged 3.13 percent (0.5 point) this week, rising 5 basis points.

Average adjustable rates also moved up. According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.94 percent (0.5 point) for the week, up from 2.91 percent previously. The 1-year ARM averaged 2.43 percent (0.4 point) from 2.41 percent.

Frank Nothaft, VP and chief economist at Freddie Mac, attributed the climb in interest rates to fair news in the housing market, pointing to new home sales—which, despite a major cut to August's figure, still grew in September to the "fastest rate observed during the recovery"—and ongoing increases in the S&P Case-Shiller price indices.

Meanwhile, Bankrate.com also reported interest rate increases for the second straight week. According to the site, the 30-year fixed gained 5 basis points this week to rise to 4.10 percent, while the 15-year fixed gained 6 basis points to reach 3.27 percent.

The 5/1 ARM climbed slightly, bumping up 3 points to 3.17 percent.

As the Federal Reserve takes a slightly more hawkish economic stance following the end of its QE3 purchases, analysts at Bankrate expect more increases to come: "With the Federal Reserve ending its bond purchase program and noting the 'substantial' improvement in the job market, the bias may be to the upside for both bond yields and mortgage rates in the coming months."