02 Jul 09 Trend Upward for Mortgage Rates
The average rate on a 15-year fixed mortgage dropped to 4.81 % from 4.93 % the prior week. The rate on a one-year adjustable mortgage loans decreased to 6.52 % last week from 6.54 %, according to the mortgage bankers. Home loan rates tracked by McLean, Virginia-based mortgage buyer Freddie Mac climbed along with Treasury yields through late May and early June on investor concern that a greater supply of government debt being sold to fund federal spending would fuel inflation.
This year the Federal Reserve purchases of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae brought down the yields on those securities, allowing lenders to reduce rates on new home loans and still sell them at a profit. Still, rising foreclosures that sell at discounted prices are flooding the market and depressing home values, according to Lawrence Yun, chief economist of the Chicago-based Realtors’ group. This year the number of foreclosures may rise to 2.5 million, the highest on record, Yun said.
Tags: Fannie Mae, Freddie Mac, mortgage bonds, mortgage loans, mortgage rates, new home loans
