Mortgage loan rate up a fraction of a point during latest week
Mar 2011 26

The average 30-year, fixed mortgage rate increased just a bit this past week, up from 4.76% on a national basis to 4.81%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.81 percent with an average 0.7 point for the week ending March 24, 2011, up from last week when it averaged 4.76 percent. Last year at this time, the 30-year FRM averaged 4.99 percent, so good news.

A $400,000, 30-year, fixed-rate mortgage at 4.76 percent would run you approximately $2,101 per month in loan repayments. This is $12 more per month when compared to last week but $43 in savings compared to last year.

This week, 15-year fixed rate mortgages averaged 4.04 percent with an average 0.7 point, down from last week when it averaged 3.97 percent. A year ago at this time, the 15-year FRM averaged 4.34 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Mortgage rates were up this week compared to last, but still remain at relatively low levels. The rate uptick was related to higher than anticipated inflation data for February and ongoing geopolitical concerns. The 12-month growth rate in the consumer price index rose 2.1 percent in February, compared to 1.6 percent in January; however, most of the increase was due to food and energy prices, which tend to be volatile. The core index rose 1.1 percent, slightly up from 1.0 percent in January.

“The housing market recovery experienced a setback during the start of this year. Existing home sales fell 9.6 percent from January to February and were down 2.8 percent from February 2010. Sales of new homes declined for the second consecutive month in February to record lows dating back to 1963. Even new construction on one-family homes fell 11.8 percent in February to the third slowest pace since 1959.”

Do you think rates will continue to rise as the economy recovers and/or because the federal government keeps borrowing more and more money? Will the current unease in the world (natural and man-made) bring fear to the financial markets?

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