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Average mortgage rates increased for a second consecutive week, according to Freddie Mac's Primary Mortgage Market Survey. Rates appear to be rebounding from yearly record lows reached two weeks ago.

The 30-year average fixed-rate mortgage increased to 3.59 percent for the week ending August 9, 2012. The weekly average rate was up 4 basis points from the previous week and 10 basis points from the yearly low of 3.49 percent.

The 15-year average fixed-rate mortgage increased to 2.84 percent for the week, up 1 basis point from the previous week. The 15-year average also reached its yearly record low two weeks ago at 2.80 percent.

Mortgage market rates appear to be rebounding from a floor reached during the July 26 week. Frank Nothaft, Freddie Mac's Vice President and Chief Economist, also attributed the increases to non-farm payroll improvements in July.

Average rates for the year stand at 3.80 percent for the 30-year FRM and 3.06 percent for the 15-year FRM. This is in comparison to 2011 30-year and 15-year FRM averages of 4.45 and 3.68 percent, respectively.

The increase in average mortgage rates also corresponds with a decrease in the number of mortgage applications reported by the Mortgage Bankers Association for the week ending August 3, 2012.

The MBA's Market Composite Index, which measures mortgage application volume, showed a decrease of 1.8 percent for the week. The refinance portion of the Index also decreased by 2 percent for the week.

Refinancings continued to account for the largest share of mortgage application volume, remaining at 81 percent for the week.

Average 30-year contract rates reported by the MBA also increased across all loan levels for the week. The 30-year contract rate for loans below the $417,500 level increased to 3.76 percent from 3.75 percent. The 30-year rate for loans above this level increased to 4.04 percent from 4.01 percent.

In other real estate news, CoreLogic released its June Home Price Index report and Freddie Mac reported quarterly housing price increases in its August 2012 U.S. Economic and Housing Market Outlook.

According to CoreLogic's HPI, home prices increased in June by 2.5 percent on an annual basis and 1.3 percent on a monthly basis. CoreLogic's HPI has shown consecutive increases on a monthly and annual basis for the last four months, reaching a level of 143.05 in June.

Freddie Mac's House Price Index also showed strong gains for the second quarter of 2012. The Freddie Mac HPI improved to 124.23 in June from 118.52 in March which represented an increase of 4.8 percent.

Forward-looking projections by the government-sponsored enterprise, however, show a slowdown in housing price appreciation. While Q2 was a strong quarter, it appears the second half of the year could see declines as prices are affected by shadow inventory and the remaining real-estate-owned properties in the market. The GSE's forward-looking housing price estimates show no change in Q3 and a decrease of 4.2 percent in the final quarter of the year.

Source: Mortgage Market Weekly Update: Rates Continue To Rebound