23 Jun 09 Thirty Year Mortgage Rates Continue to Rise
Mortgage interest rates on U.S. 30-year fixed-rate mortgages rose to 5.57 % a few days after hovering around 5.47% earlier in the week. According to Zillow Mortgage the rate are down sharply from the previous week when mortgage rates were reported nationally with an average of 5.76% on home loans that were fixed for thirty years.
Conventional and FHA mortgage rates have remained historically low in 2009 and most industry insiders believe that interest rates will maintain low levels for the remainder of the year and into 2010 before climbing with the forecasted inflation. The higher mortgage rates reflect a rise in yields on U.S. government bonds, which are linked to the mortgage market. The mortgage rate, however, is sharply higher than the roughly 5.00% level seen at the end of May and at the beginning of this year, Zillow said.
Home loan refinancing activity has dropped precipitously in recent weeks. A move higher in FHA mortgage rates should further dampen demand. According to Lawrence J. White, professor of economics at New York University’s Stern School of Business, “Higher mortgage rates are certainly an impediment to a U.S. housing market recovery, but other factors are also suppressing demand. “People are worried about the overall economy, how secure their jobs are as well as their overall financial status,” he said. “So, while higher mortgage rates matter, they are not the sole driver of housing demand,” he said.
The applications for mortgage refinance loans dropped as expected, but loan modification requests rose significantly as bad credit mortgages are beginning to reset to the higher adjustable interest rates that have homeowners around the nation fighting to keep their home from foreclosure. The battered U.S. housing market, which is in the midst of its worst downturn since the Great Depression, is both the source of and a major casualty of the credit crisis. A setback for the market could hamper a turnaround of the U.S. economy.
Tags: bad creditmortgages, FHA mortgage rates, home loans, loan modification, mortgage rates, mortgage refinance loans, thirty year mortgage rates
