Mortgage rates on a 30-year fixed-rate are making a steady climb towards 5%. According to the latest rates posted for the week ending January 27th by the mortgage servicer Freddie Mac, rates are edging closer and closer to the 5% mark expected early this year by many economists in the sector.
Recently the mortgage rates have followed the increasing bond yields surrounding increased confidence in a strengthening economy and favorable data in reports from the Conference Board. Before the slight and steady increase in the last few months surrounding fixed mortgage rates, rates declined for a majority of 2010. The declines last year were related to the slide in Treasury yields which resulted in uncertainty of the nation's economic security. Because of this uncertainty, mortgage rates continued to slide, hitting repeated record lows, often week-to-week.
Now rates are on the rise, according to Freddie Mac's weekly survey of mortgage rates, for the week ending January 27th, the average rate for a 30-year fixed-rate mortgage was 4.8%. That figure is 0.06% higher than the 4.74% posted a week earlier. Still, that increase is lower than the average of 4.98% which was posted for a 30-year fixed-rate this time last year.
The average on a 15-year fixed-rate also showed a slight increase for the week ending January 27th. The average posted was 4.09%, which was a 0.04% from 4.05% average posted a week prior. The 4.09% average is considerable lower than the 4.39% average posted this time last year for a 15-year fixed-rate mortgage.
To obtain the posted rates, borrowers were required to pay a .07 point. A point is considered to be 1% of the mortgage amount. This payment is charged as prepaid interest towards the mortgage.
Mortgage rates are on the rise; however, they are still at historic lows. The rise in mortgage rates shows that Treasury yields are increasing and tend to suggest that the economy is becoming stronger. Therefore, this slight increase should not be viewed as a bad thing.
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