30-Year Rates Rise for 2nd Straight Week
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Saturday, August 1, 2009
Rates for 30-year mortgages rose for the second straight week, Freddie Mac said Thursday.
The average rate for a 30-year, fixed-rate mortgage was 5.25 percent this week, up from 5.2 percent last week. Last year at this time, 30-year mortgages averaged 6.52 percent, Freddie Mac said.
Earlier this year, rates on 30-year mortgages fell to a record low of 4.78 percent, kick-starting refinancing activity. Last month, rates rose to nearly 5.6 percent after yields on long-term government debt, which are closely tied to mortgage rates, climbed.
"Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields," said Frank E. Nothaft, Freddie Mac's chief economist.
New- and existing-home sales rose in June as foreclosures and a government tax credit helped lure buyers. The S&P/Case-Shiller home price index rose 0.5 percent in May from the prior month, the first gain since July 2006. Existing-home sales climbed 3.6 percent, to an annual rate of 4.89 million, according to the National Association of Realtors.
"Rates may be low, but I think lenders are still being very cautious," said Celia Chen, senior director at Moody's Economy.com. "Lenders are just being careful about who they lend to."
The Mortgage Bankers Association's index of home-loan applications fell 6.3 percent in the week ended July 24. Purchase applications were little changed, and requests to refinance fell 11 percent.
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 4.69 percent from 4.68 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.75 percent, up slightly from 4.74 percent last week. Rates on one-year, adjustable-rate mortgages increased to 4.8 percent from 4.77 percent.
Borrowers can lower their interest rates by buying points, which equal one percentage point of the loan amount. The nationwide average in the Freddie Mac survey was 0.7 point for 30-year and 15-year fixed mortgages. Five-year, adjustable-rate mortgages averaged a 0.6 point, and one-year, adjustable-rate mortgages averaged 0.5 point.
