15-Year & 30-Year Fixed Rate Mortgages Increase
The average fixed rate on a 15-year mortgage rose nationally to 3.30% percent last week (from 3.16%), Freddie Mac reported. The traditional 30-year mortgage rate jumped to 4.08% from 3.92%.
Mortgage rates, which have been hovering around record lows are rising with higher yields on 10-year Treasury notes. Freddie Mac’s chief economist, Frank Nothaft, says they expect 30-year fixed rate loans to be nearer to 4.25% to 4.5% by the end of the year.
While higher mortgage rates may be historically bad news for housing, Nothaft says that impact of higher rates will be somewhat offset by:
- Rates are still incredibly low. From 1990 to 2010 mortgage rates averaged 7.1%.
- Home prices are still falling in some markets. Home prices are still 34% below their 2006 peak. Many industry experts predict that these moderate rate increases will not halt the housing recovery.
- Rising rates may give people the push they need – to get off the fence and into buying.
- Home sales, while experiencing a slight dip from January to February, are still 9% higher than a year ago. Building permits for single family homes have reach their highest point in 22 months. Building permits signal future construction.
Buying a home? Refinancing? To take advantage of low interest rates, contact a licensed mortgage loan officer near you to discuss your financing options.
Other Economic News
Federal Reserve Chairman Ben Bernanke said job market gains are healthy but may not be sustainable given the overall sluggish ecomony. He says, “The improvement in the labor market over the past year — especially the decline in the unemployment rate — has been faster than might have been expected, given that the economy during that time appears to have grown at a relatively modest pace,” Bernanke told the National Association for Business Economics on Monday.
The unemployment rate fell from 9% to 8.3% in 5 months, while the U.S. economy has been slowly growing – at a 3% annual pace. Bernanke called those figures a ‘puzzle.’ Bernanke says that for unemployment to fall that significantly, the economy should have been growing much more quickly.
Bernanke continued to say “We cannot yet be sure that the recent pace of improvement in the labor market will be sustained. ” The economy will have to rev up more substantially for the unemployment rate to keep falling. This gives the Fed more reason to keep its easy-money policies in place, Bernanke said.
According to Reuters, global stocks rose after Bernanke announced that a continuation of easy monetary policy would be key to cutting U.S. unemployment.
Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.