Current mortgage rates are higher than just weeks and months ago.
Actions taken by the Federal Reserve that started in the fourth quarter
of last year helped push down mortgage rates during spring. The Fed's
announcement to buy up mortgage-backed securities and long-term
Treasury bonds helped keep these borrowing rates down, only to see them
climb back quickly beginning in May. There is hope, however, that
mortgage rates
will drop back down to rates the nation saw in March and April. In
March borrowers could lock in rates on a 30-year FRM at a national
average of 4.22%. For the first time in weeks these borrowing rates
began to drop. On Monday morning of this week rates for 30-year FRM's
averaged 4.91%. By the afternoon borrowers could lock in those mortgage
rates at 4.72%, on average. The continued drop of Treasury yields will
likely help continue this trend for the short term. The Federal Reserve
is also worried about the recent rise in
mortgage rates.
It is the opinion of many financial and economic experts that
stabilizing and improving the housing market is the key to improving
the entire economy. Higher rates means less expendable income for
homeowners, meaning less money being pumped into other sectors of the
economy. Some homeowners considering refinancing to lower mortgage loan
rates fear they missed the boat in April when lending rates began
rising again. The Feds could once again intervene as they did last year
and pledge the purchase of more securities and bonds. This, however,
would only be another temporary fix, just as the first quarter of 2009
proved. With increasing deficits yields on the benchmark 10-year
Treasuries push higher, in turn, mortgage rates follow suit. New
jobless claims reports will be something else to watch concerning
mortgage rates. An increase in claims would again indicate the slow
state of the nation's economy, helping to push interest rates down.
Mortgage rates fell back from the recent highs for the year. The
average rate for a 30-year fixed mortgage was 5.38 percent this week,
down from 5.59 percent a week earlier. The average rate for a 15 year
fixed rate mortgage averaged 4.89 percent this week, down from last
week when it averaged 5.06 percent Freddie Mac said. Points on both
mortgage rates are an average of 0.7 percent. Adjustable rate mortgages
have also come down this past week, averaged 4.97 percent this week,
with an average 0.6 point, down from last week’s average rate of 5.17
percent. Average rates on one year adjustable rate mortgages have also
come down to 4.95 percent this week , down from last week when it
averaged 5.04 percent with an average 0.6 point.
