April 8, 2010
Buying a home just got more expensive. No, home prices haven't risen, but mortgage rates have, hitting their highest point in the last eight months, according to Freddie Mac.
The average rate was 5.21 percent this week, according to Freddie Mac's weekly survey of conforming mortgage rates. That's up from an average of 5.08 percent last week and 4.87 percent a year ago. It hasn't been this high since last August, when the average rate nationwide hit 5.29 percent.
The 15-year fixed rate mortgage this week averaged 4.52 percent with an average 0.6 point, up from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.54 percent. This is the highest the 15-year FRM has been since the week ending December 31, 2009, when it averaged 4.54 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent this week, with an average 0.6 point, up from last week when it averaged 4.10 percent. A year ago, the 5-year ARM averaged 4.93 percent.
The 1-year Treasury-indexed ARM averaged 4.14 percent this week with an average 0.5 point, up from last week when it averaged 4.05 percent. At this time last year, the 1-year ARM averaged 4.83 percent.
Bond yields push rates up
"Once again, mortgage rates followed bond yields higher amid a positive March employment report," said Frank Nothaft, Freddie Mac vice president and chief economist. "The economy added 162,000 jobs, which was the largest monthly gain over the past three years. In addition, revisions raised the January and February figures by a combined 61,000 workers. Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007.
Following its extension in early November of last year, the homebuyer tax credit is showing some impact on housing market activity, mostly through the use of government-insured mortgages, which tend to be a favorite among first-time homebuyers.
Compared to the week ending December 4, 2009, which was the first week after the original expiration date, mortgage applications for home purchases are up 17 percent for the first week in April of this year for government-insured loans, compared to an 11 percent decline in conventional loans, according to the Mortgage Bankers Association.
Also, pending existing home sales jumped 8.2 percent in February, well above the market consensus and represented the second largest increase since records began in 2001, the National Association of Realtors reported this week. Homebuyers must enter a housing contract by April 30th and close by June 30th in order to receive the tax credit.
