Rates Jump Dramatically to Six Month High
If you were waiting for mortgage interest rates to go even lower, you may have missed the boat. After staying below 5 percent and near record lows for several months, rates on 30-year fixed rate mortgages surged upward during the latest week, according to data from mortgage company Freddie Mac.
During the week ended June 4, 2009, the average rate grew to 5.29 percent, excluding fees, a huge increase from 4.91 percent the week before. That accounts for the highest rate since the week of December 11, 2008, almost six months ago.
“Thirty-year fixed-rate mortgage rates caught up to the recent rise in long-term bond yields this week to reach a 25-week high,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
According a new report from Jeff Tyler on Marketplace,
“Mortgage rates are closely tied to U.S. Treasury bonds. Investors worried about the ballooning federal deficit are shying away from buying the government’s debt. The Federal Reserve has been pumping money into T-bills to keep rates down. But that may not be enough to bring mortgage rates back to the historic lows seen in March.”
The Associate Press also mentioned that “yields on long-term Treasury debt have since edged back downward following lackluster economic reports.”
So, if bonds yields continue to fall, mortgage rates may also return to that trend. Of course, these things are rather unpredictable, so if you are at all worried about rates continuing to move up, you might want to run to your favorite mortgage lender and lock in the current rate for your upcoming refinance or home purchase.
Amber Nelson on June 4th 2009 in Home Buying, Interest Rates, Mortgage Credit, Mortgage News
