©Copyright 2010 Information Inc.
Reprinted from REALTOR® Magazine, April 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.
Mortgage rates rose to 5.08 percent from 4.99 a week ago, pushing the average interest rate offered on 30-year fixed rate mortgages to its highest level since the first week of 2010, according to Freddie Mac.
The increase in mortgage rates occurred as long-term interest rates rose higher due to conerns about inflation as the economy improves, and as the Federal Reserve ended its program to buy $1.25 trillion in mortgage-backed bonds issued by Fannie Mae, Freddie Mac and other government-sponsored agencies.
Also, the 15-year fixed mortgage rose to 4.39 percent from 4.34 percent, while 5-year hybrid mortgages fell to 4.10 percent from 4.14 percent.
It is most important that a buyer stays in touch with their mortgage consultant to make sure they have a locking strategy in place. Rates can move very quickly and, in some cases, this could mean the difference between a loan approval and a denial. A rate change of just a 1/2 point can affect your buying power significantly.
Most experts believe that once the current government program ending the purchase of mortgage backed securities ends, interest rates will rise quickly and dramatically. Some forecasters are saying that rates could go above 6% by the end of the year.
The matrix below shows how mortgage payments will be affected by this rise in rates.
Source: Steve Harney, Keeping Current Matters, January 14, 2010
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