MORTGAGE RATES » Home Mortgage Loan News

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.

President Barack Obama has recently proposed another way for Americans to take advantage reimbursements while improving the environment - this time, his proposal is "Cash for Caulkers." The program, if followed through, is said to likely follow New York State's home energy efficient program, but will be expanded nationwide and could offer homeowners up to $12,000 in rebates.

How New York's Program Works

Currently, the New York efficiency program works something like this:

• Homeowners find a contractor licensed by the state to do an energy audit.
• The contractor shows up and charges about $500 to figure out how much energy the home wastes by testing appliances as well as insulation and window thickness.
• The information is fed into a computer model that generates a checklist with everything that could be replaced, how much it will cost and how much in energy savings the homeowner could expect.
• The homeowner will then negotiate a price.
• Once the work is done, the homeowner pays the contractor, the contractors submits paperwork to the state agency that runs the program, then the homeowner gets a reimbursement check for 10 percent of the project cost - usually within 30 days.

Will "Cash for Caulkers" Follow This Plan?

So far, there is no official word on how the federal program - which is a part of a broader plan to stimulate the economy that includes money for small businesses, infrastructure and renewable energy manufactory - might work. However, one notable difference that has shown up on previous bills is that the federal program might increase the reimbursements to 50 percent, or up to $12,000.

Obama was noted as saying that he hopes improved energy efficiency would create jobs, save money and reduce pollution. Reports say that those who take full advantage of the program could reduce energy bills by up to 20 percent. Not bad.

Is "Cash for Caulkers" a program you'd be interested in taking advantage of?

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