While mortgage rates have managed to remain below five percent for two months, according to the Freddie Mac weekly survey for the week ending Dec. 18, 2009, the rates seem to be rising a bit. According to the survey, the rates rose that week and have climbed closer to five percent for the 30-year fixed rate mortgage.
Why the Increase?
According to Freddie Mac’s chief economist, Frank Nothaft, current mortgage rate, 4.94 percent, seemed to have followed yields on Treasurys, which had risen in the past week. Additionally, an onslaught of refinancing activity brought on by the rate being low for so long has actually contributed in raising the rate a bit.
Here is a breakdown of the week’s rates from Freddie Mac:
- 30-year fixed rate mortgage – 4.94% (up from 4.81% the week prior)
- 15-year fixed rate mortgage – 4.38% (up from 4.32% the week prior)
- 5-year Treasury-indexed ARM – 4.37% (up from 4.26% the week prior)
- 1-year Treasure-indexed ARM – 4.34% (up from 4.24% the week prior)
Is the Housing Market Improving?
Typically, when rates begin to rise, this is a sign that the housing market may be improving a bit. However, reports have been inconsistent for many months now – ups and downs only a few months apart. For example, home construction rebounded more than expected in November after a surprising drop the month prior, according to the Commerce Department.
Because data seems to rise and fall, the experts seem to think it’s hard to predict at this point whether a true recovery is on the way.
