Mortgage Rates Continue to Rise

By:: Kirk Haverkamp - MortgageLoan.com

Mortgage interest rates continued to climb this last week, rising nearly one-tenth a percent in the current Freddie Mac weekly survey, released today.

Average rates on 30-year fixed rate loans hit 5.14 percent, up from 5.05 percent the week before. Rates have been rising steadily the past four weeks, gaining about one-tenth of a percent each week since hitting their recent low of 4.71 percent the week ending Dec. 3. Average fees and points have held steady at 0.7 points.

It’s also the first time in over a year that the current average 30-year rate exceeded the rate from 12 months before; the average 30-year rate for the last week of 2008 was 5.10 percent.

“Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards,” said Frank Nothaft, chief economist for Freddie Mac.. “Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50 percent less in interest payments over the full 30-year term.

Other rates have been climbing as well; the average on 15-year fixed-rate loans rose to 4.54 percent, up from 4.45 percent last week more than a quarter of a percent above their recent low of 4.27 on Dec. 3, with average fees and points holding steady at 0.6. That rate still remains well below its mark one year ago of 4.84 percent.

Average rates on five-year Treasury indexed adjustable rate mortgages rose (ARMs) to 4.44 percent, up from 4.40 percent last week and up a quarter-percentage point from its recent low of 4.18 percent on Nov. 25. In contrast to the fixed-rate loans, that rate remains far below its average of 5.57 percent one year ago, when lenders were doing their best to avoid ARMs in the wake of the collapse of the subprime mortgage market.

Analysts have been predicting that higher mortgage rates are on the way, in anticipation of the end of the Federal Reserve’s purchase of $1.25 trillion in mortgage securities in March. Those purchases and other efforts triggered a big drop in rates when they were first announced last March and have been a key factor in rising home purchases and strong mortgage refinance activity through much of 2009.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.80
15 yr fixed	3.10
5/1 ARM	2.73

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