Mortgage Rates Ease for Second Week

By:
Peter King | January 14, 2010

Mortgage rates eased slightly for the second consecutive week, giving borrowers a respite after a December in which some interest rates by nearly half a percent.

Average rates on 30-year fixed-rate loans declined to 5.06 percent for the week ending Jan. 14, according to Freddie Mac’s weekly rate survey, down from 5.09 percent the week before, with 0.7 points paid. Rates on 15-year fixed-rate loans fell to 4.45 percent, from 4.50 percent last week, with 0.6 points.
 
A bigger drop was posted by the 5-year Treasury indexed hybrid adjustable-rate mortgage, which had an average interest rate of 4.32 percent with 0.6 points, down from 4.44 percent for the week ending Jan. 8.
 
Mortgage interest rates have posted moderate declines since the first of the year, following four consecutive weeks of sharp increases after reaching near-record lows in early December. Rates on 30-year fixed-rate mortgages bottomed out at 4.71 percent the week ending December 3, then rose over the next four weeks to hit 5.14 percent the week ending Dec. 31 before falling back again.
 
With the Federal Reserve scheduled to end its purchases of mortgage-backed securities in March, there have been concerns about the direction mortgage rates will take. The Mortgage Bankers Association predicted earlier this week that rates on 30-year mortgages would hit 6 percent by midyear. The Fed’s purchase program has been credited with supporting unusually low mortgage rates throughout 2009, after it was announced last March.

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