Mortgage Rates Rise From Record Low
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Friday, May 8, 2009
Rates on 30-year mortgages inched up this week after matching a record low a week earlier.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year, fixed-rate mortgages rose to 4.84 percent this week, down from an average of 4.78 percent last week. Rates have been below 5 percent for eight consecutive weeks.
The all-time low of 4.78 percent was first recorded the week of April 2 and again last week. Freddie Mac's survey dates back to 1971.
Low rates have sparked a surge in refinancing activity, with about 75 percent of home loan applications coming from borrowers seeking to refinance.
Frank Nothaft, Freddie Mac's chief economist, said in a statement that the slight rise came amid news that "the economy may be approaching the bottom of the recession."
Mortgage rates fell dramatically over the winter. They fell more after the Federal Reserve said earlier in March that it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year, fixed-rate mortgage rose to 4.51 percent this week from 4.48 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages rose to 4.9 percent from 4.8 percent. Rates on one-year, adjustable-rate mortgages rose to 4.78 percent from 4.77 percent.
Borrowers can reduce their interest rate by paying a fee called a point. Each point costs 1 percent of the mortgage amount. The fees averaged 0.7 point last week for 30-year and 15-year mortgages and 0.6 point for five year and one-year adjustable rate loans.
