US fixed mortgage rates trend higher

U.S. fixed mortgage rates edged up slightly this week as market speculated the Federal Reserve will reduce future bond purchases, said the Primary Mortgage Market Survey released Thursday by Freddie Mac. The U.S. mortgage giant said that the 30-year fixed-rate mortgage (FRM) rose to 4.51 percent in the week ending July 11, up from 4.29 percent in the previous week, the highest level since July 2011. The 15-year FRM, a popular choice for those looking to refinance, climbed to 3.53 percent this week, up from 3.39 percent last week, the highest level since August 2011. Meanwhile, the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) edged up to 3.26 percent, while the one-year Treasury-indexed ARM stayed unchanged at 2.66 percent, according to the survey. "June's strong employment led to more market speculation that the Federal Reserve will reduce future bond purchases causing bond yields to rise and mortgage rates followed," noted Freddie Mac Vice President and Chief Economist Frank Nothaft. In June the U.S. economy gained 195,000 jobs, slightly more than the average monthly gain of 182,000 over the prior 12 months, though the unemployment rate was stuck at 7.6 percent.