Thursday, December 10, 2009

Mortgage interest rate upward trend confirmed

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Slightly higher interest rates for home mortgages reflect higher long-term bond yields and improved employment outlook. Rates remain nearly three quarters of a percentage point below last year's.

by Broderick Perkins
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Deadline Newsroom - The average interest rate on a 30-year fixed-rate mortgage (FRM) inched up to 4.81 percent for the week ending December 10, 2009, compared to the record low 4.71 percent last week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

The average rate includes an average 0.7 point. Each point is one percent of the financed amount.

The lowest rates were in the West where they averaged 4.78 percent.

Earlier this week, Calabasas, CA-based Informa Research Services reported a similar reverse course in the cost of borrowing home financing money.

Frank Nothaft, Freddie Mac vice president and chief economist said the up tick was due to easing unemployment conditions and higher long-term bond yields.

"Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage," Nothaft said in a prepared statement.

Freddie's PMMS also reported the 15-year FRM, this week averaged 4.32 percent with an average 0.6 point, also up from 4.27 percent last week but down from 5.20 percent a year ago.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.26 percent this week, with an average 0.5 point. Last week it averaged 4.19 percent; a year ago, 5.82 percent.

The 1-year Treasury-indexed ARM averaged 4.24 percent this week with an average 0.7 point, down slightly from last week's 4.25 percent average and 5.09 percent a year ago.

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