More Increases in US Mortgage Rates

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U.S. mortgage rates increased for the second consecutive week, on the heels of stronger than expected economic data, according to Freddie Mac. 

The average 30-year fixed-rate mortgage was 4.35 percent this week, the highest in two months, from 4.16 percent last week. At this time last year, it averaged 3.34 percent. 

Interest rates are rising as the economy's fundamentals continues to improve, analysts say. 

"Nonfarm payrolls increased by 204,000 in October, above the consensus forecast," Frank Nothaft, vice president and chief economist, Freddie Mac, said in the report. "In addition, revisions added 60,000 additional jobs to the prior two month releases. Preliminary estimates indicate Real GDP growth in the third quarter was 2.8 percent, also above consensus."

The 15-year fixed-rate mortgage was 3.35 percent, up from 3.27 percent last week. 

The one-year treasury-indexed ARM averaged 2.61 percent this week, unchanged from last week. 

As the improved economic data pushes rates up, buyers may hesitate in entering the housing market. Yesterday the Mortgage Bankers Association reported a drop in mortgage applications for the second straight week.