Bank rates were higher across the board this past week with the rise in lending rates remaining relatively light while the rise in savings products was more pronounced.  Mortgage rates inched a little higher over the course of the week along with consumer credit card rates.  Bank CD rates increased by a slightly larger magnitude as did the average rates on money market accounts and savings accounts. 

Bank rates appear to be reacting more to the ups and downs of the stock market as opposed to the release of new economic data points.  The outlook for the economy has rapidly improved after many of the big tax and spending issues facing Congress had passed with the resolutions agreed to in the first week of January.  Note, not all issues spending and tax issues were resolved with the sequester spending cuts still scheduled to kick in March 1st. 

The improved outlook has set off a shift in assets by investors from bonds and bond funds and into stocks.  The Dow Jones Industrial Average has recently approached an all-time high.  The shift to riskier assets classes has reduced the demand for fixed income securities such as Treasury bonds and mortgage backed securities, pushing their prices lower and interest rates higher.  As a result of the changing economic outlook, mortgage rates have increased steadily albeit, moderately, almost every week in 2013.

Optimism and growth in the housing market is contributing to the current optimistic economic landscape.  More housing gauges are showing increased prices which is being matched with increased building activity and increased sales.  The housing recovery however, does remain fragile with prices and sales varying widely by region across the country.  

For a more pessimistic look, the economic recovery will depend not on just improved housing numbers but sustained job growth as well.  Housing is improving but very slowly with much of the improvement coming from the reduction in foreclosure inventories.  Job growth is even more questionable and has taken place with sporadic improvements as the nation’s unemployment rate remains elevated at 7.9%.
As the outlook for sustained growth in the economy remains uncertain the rise in interest rates is not.  Mortgage rates moved up again for the most popular home loan products in the current bank rate survey.  The average 30 year fixed rate mortgage moved up to 3.679 percent while the average 30 year FHA mortgage rate climbed to 3.538 percent.

Credit card rates ticked up by one basis point or .01 percent for the week, after holding firm in the week earlier.  The average rate for new credit card offers ended the week at 13.76 percent.  The average rate covers credit card offers from dozens of credit cards across multiple card categories from cash back credit cards to low rate credit cards.  The credit card rate excludes promotional credit card offers such as zero rate introductory credit card promotions.

CD rates showed a greater rate change in this week survey over that of the bank lending products.  The average CD rate found in the CD rate index rose to 1.039 percent from 1.024 percent in the week earlier. Three month CD rates, one year CD rates, two year CD rates and five year CD rates all showed incremental rate increases, only the six month CD failed to show an uptick on the week.  As is often the case with bank savings rates, CD rates have lagged the recent rise in both short term and long term interest rates and may still show considerable variations in the coming weeks as money market rates rise even as most banks do not need to compete for depositor funds due to slack loan demand and a mass of excess reserves.

The weekly bank rate survey provides a detailed report on bank savings rates and lending rates by consumer rate category.  The most current survey is for the week ending February 15, 2013.  The weekly rate survey presented the following interest rates and their changes for mortgage rates, CD interest rates, credit card rates, money market rates, savings account rates and Treasury rates.

Bank Rates Market Recap for February 15, 2013

CD interest rates:
Composite CD interest rate index 1.039 percent (up .015 percent) 
3 month CD rates 0.480 percent (up .008 percent) 
6 month CD rates 0.753 percent (unchanged) 
1 year CD rates 1.037 percent (up .005 percent) 
2 year CD rates 1.189 percent (up .025 percent) 
5 year CD rates 1.736 percent (up .039 percent)   

Money market and savings account rates:
Bank money market rates and savings account rates 0.942 percent (down .002 percent)

Mortgage rates:
 30 year mortgage rates 3.679 percent (up .004 percent) 
15 year mortgage rates 2.860 percent (up .014 percent)  
20 year mortgage rates 3.611 percent (up .016 percent) 
30 year jumbo mortgage rates 3.912 percent (down .025 percent) 
30 year FHA mortgage rates 3.538 percent (up .013 percent)

Credit card rates:
Credit card rates for new credit card offers 13.76 percent (up .01 percent)

Treasury rates:
Six month Treasury rate 0.13 percent (up .02 percent) 
One year Treasury rate 0.17 percent (up .03 percent)
Two year Treasury rate 0.29 percent (up .04 percent)
Five year Treasury rate 0.87 percent (up .03 percent)
Ten year Treasury rate 2.01 percent (up .02 percent)

All bank savings rates and lending rates are based on surveys conducted by at the close of February 15, 2013 with all of the interest rates obtained directly from the banks within the survey.  Treasury rates are obtained directly from the Department of the Treasury.  

Additional bank rate data is available to help consumer shop and compare mortgage rates, CD rates and checking accounts for the week ending February 15, 2013 at the following rate tables:  9 month CD rates, 3 year CD rates, 4 year CD rates, 10 year mortgage rates, best interest checking accounts.

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