For the second week in a row, Freddie Mac reported 30- and 15-year fixed rates, along with 5/1 hybrid ARM rates, increased as yields rose in response to better-than-expected economic data, specifically last Friday's jobs report.

The 30-year fixed rate averaged 3.59% for the week ending Aug. 9, up four basis points from last week; the rate is at its highest level in four weeks. The 15-year rates increased just one basis point to 2.84%, while hybrid rates rose to 2.77% from 2.75%. Meanwhile, one-year ARMs declined for the third straight week to 2.65%, down five basis points from last week.

Despite still historically attractive mortgage rate levels, mortgage activity is expected to ease in response to both higher rates and burnout.

Yesterday, for example, the Mortgage Bankers Association reported the Refinance Index fell 2% to ~5344 in the week ending Aug. 3. Contributing in part to the decline was a slight increase in mortgage rates for that week.

However, burnout seems a more likely factor as refinancing activity had jumped 25% over the previous three weeks to its highest level since April 2009 as borrowers responded to new historical lows in mortgage rates, and in the case of Federal Housing Administration loans, to a decline in mortgage insurance premiums for pre-June 2009 borrowers that became effective June 11.

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