Instead of declining toward 4.5% which is what the government wants, mortgage rates have been moving higher since hitting 4.96% on Jan. 15.
Freddie Mac's weekly survey reported that the 30-year fixed mortgage rate rose 15 basis points to 5.25% this week, its highest level since 5.47% on the Dec. 11 report.
Frank Nothaft, the GSE's chief economist, attributed the increase to better-than-expected economic reports this week such as the fourth quarter GDP and personal income.
Treasury rates have also been impacted by the increased supply concerns.
In the other loan types, 15-year fixed mortgage rates were up 12 basis points to 4.92%, while adjustable rates remained almost the same with the one-year ARM two basis points higher to 4.92% and 5/1 hybrid ARMs a basis point lower to 5.26%.
Mortgage application activity is expected to be lower given the higher rate levels and expectations that the government will push them lower.
For the week ending Jan. 30, Freddie Mac reported a two basis point decline in 30-year fixed rates to 5.10%, which contributed to a 15.8% jump in the Mortgage Bankers Association's Refinance Index to 3906.