Mortgage Rates on 30-Year Home Loans Rise to 5.01%

2010 February 4

Rates on fixed-rate mortgages rose slightly for the week ending February 4, 2010, with the 30-year fixed-rate mortgage averaging just higher than 5%, according to Freddie Mac’s weekly survey of conforming mortgage rates.

Mortgage rates rose for the first time in five weeks, threatening to slow the housing market’s recovery as government tax credits near expiration. The government’s tax credit program gives home buyers until April 30, 2010 to have a signed contract on a home and until July 1, 2010 to close on it.

Low mortgage rates, average home price declines of 30% from 2006 peaks and federal home buyer tax credits have started stabilizing housing sector after a three-year plunge. Economists forecast that 30-year mortgage rates will rise to 6% by the end of the year.

The Federal Reserve’s Federal Open Market Committee plans to end its $1.25 trillion mortgage-backed securities-buying program at the end of March 2010.

Mortgage purchases are credited with helping reduce mortgage rates, which fell to a record low of 4.71% in December.

30-year fixed-rate mortgage averaged 5.01%, up from 4.98% last week, 5.25% a year ago.

15-year fixed-rate mortgages averaged 4.40%, up from 4.39% last week, 4.92% a year ago.

5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.27% this week, up from 4.25% last week. The ARM averaged 5.26% a year ago.

1-year adjustable-rate mortgages averaged 4.22% this week, down from 4.29% last week and 4.92% a year ago.

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