Mortgage rates rise for second week in a row (but still below 5%)
Mar 2011 31

The average 30-year, fixed mortgage rate increased just a bit this past week, up from 4.81% on a national basis to 4.86%, according to the Freddie Mac weekly survey of loan providers.

The 30-year fixed-rate mortgage (FRM) averaged 4.86 percent with an average 0.7 point for the week ending March 31, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.08 percent, so good news.

A $400,000, 30-year, fixed-rate mortgage at 4.86 percent would run you approximately $2,113 per month in loan repayments. This is $12 more per month when compared to last week but $53 in savings compared to last year.

This week, 15-year fixed rate mortgages averaged 4.09 percent with an average 0.7 point, up from last week when it averaged 4.04 percent. A year ago at this time, the 15-year FRM averaged 4.39 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac says, “Fixed mortgage rates rose slightly for a second week in a row, but continue to remain quite low. Low rates have benefited from relatively benign inflation reports. Inflation as measured by the 12-month growth in the core price index for consumer spending, a metric preferred by the Federal Reserve, is hovering near the lowest pace since 1960 when this data series began.”

Sounds as though Mr Nothaft thinks rates might remain steady but I’m not so sure we can assume that to be true.

I don’t know what would happen to consumer confidence and the real estate market if rates went up over 5%. That would affect a lot of people’s thinking, I think.

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