17 Dec 09 Mortgage Rates Up but Stay Below 5 Percent
Freddie Mac reported the average fixed rate on a thirty-year home loan was 4.94% this week, up from 4.81 % last week. Mortgage rates are closely tied to yields on long-term government debt, which have risen since the average fixed rate on thirty-year mortgages hit a record low of 4.7% the week of Dec. 3.
A Federal Reserve program to buy $1.25 trillion in mortgage-backed securities has kept rates on thirty-year mortgages under 5% this year. The government mortgage programs, like FHA and VA were created to make home buying more affordable, is set to end next spring.
The low rates resulted in a wave of refinancing activity: The Mortgage Bankers Association reported that nearly 3 out of 4 home loan applications were for home refinancing during the first few weeks of December, Freddie Mac collects mortgage rates each week from lenders around the country. Home mortgage rates often fluctuate, even within a given day.
The average rate on a fifteen-year fixed mortgage rose to 4.38% from 4.32% last week. Mortgage rates on five-year, adjustable-rate mortgages averaged 4.37%, up from 4.26% last week. Rates on one-year, adjustable-rate mortgages rose to 4.34% from 4.24%.
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