Mortage Interest Rates on the rise: The Washington Post reported today that mortgage interest rates have continued to rise over the past 2 weeks.
The average rate for a 30-year fixed loan rose to 4.99 percent this week from 4.96 percent last week, mortgage finance company Freddie Mac said.
The average 15-year rate was 4.34 percent, up a bit from 4.33 percent last week.
Rates on five-year, adjustable-rate mortgages averaged 4.14 percent, up from 4.09 percent. Rates on one-year, adjustable-rate mortgages rose to 4.20 percent from 4.12 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.6 of a point.
Economists continue to watch mortgage rates while the Federal Reserve slows their $1.25 trillion bond program backed by home loans that is supposed to end on Wednesday. Rising interest rates make homes less affordable for buyers, and the number of home sales has also decreased partially because of foreclosures, blizzards, unemployment, and the overall market conditions. If for some reason there is a sharp increase in interest rates, the Fed reserves the right to increase the number of bonds they buy. Interest rates often fluctuate significantly and often correlate with these Treasury bonds.
Aside from a decrease in home sales, just last week the Mortgage Bankers Association (MBA) reported a decrease in refinance activity but an increase in actual home buying activity.
Data also varies regionally, and in Arizona, people continue to buy houses. Economists are beginning to think the Arizona economy is showing signs of being on the road to recovery. With the recent changes to HAMP’s loan modification program through additional revisions to the FHA financing guidelines, there are plenty of new options for homeowners. For home buyers, the traditional FHA program is still a great option for home buying, too.
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