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.

After the Fed revealed plans to buy up more treasury securities, interest rates on long-term U.S. mortgage rates fell to their lowest average on record, according to mortgage giant Freddie Mac Thursday.

“The Federal Reserve’s announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for 30-Yr FRMs peaked last year at 6.63 percent on July 24th. With this week’s 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amounts to a savings of about $225 in monthly mortgage payments for a $200,000 loan.”

The average rate on a 30-year fixed rate mortgage (FRM) dropped to 4.85 percent, excluding fees, during the week ended March 26, 2009, from 4.98 percent the previous week. The rate has never been lower during the 38-year history of the weekly Freddie Mac survey. One year ago, the average rate was 5.85 percent.

Fifteen-year fixed rate loans carried an average rate of 4.58 percent, a decrease from 4.61 percent the week before. This is a new record low as well, the lowest on record since 1991 when Freddie Mac began collecting information on the 15-year FRM. Last year at the same time, the average rate was 5.34 percent.

Interest rates on one-year adjustable rate mortgages fell to 4.85 percent, down from 4.91 percent a week earlier. During the same week of 2008, the average rate was 5.24 percent.

The mortgage market is apparently responding well to the new, lower rates.“Potential homebuyers are taking notice of these historically low mortgage rates,” Nothaft commented. “Both new and existing home sales rose 5 percent in February. First-time homebuyers accounted for half of all existing home sales, according to the National Association of Realtors. In addition, mortgage applications for home purchases consecutively rose over the first three weeks in March, based on figures published by the Mortgage Bankers Association.”

After the Federal Reserve committed to buy up even more toxic mortgages at its bi-monthly meeting, interest rates on long-term U.S. mortgages dipped back down under the 5 percent mark again, according to mortgage giant Freddie Mac Thursday.

“Following the March 18th Federal Reserve monetary policy statement, which announced further spending initiatives on financial assets, long-term bond yields plummeted,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Yields on 10-year Treasury bonds fell by about a half percentage point after the announcement, marking the largest one-day decline since October 20, 1987.”

The average rate on a 30-year fixed rate loan dropped to 4.98 percent, excluding fees, during the week ended March 19, 2009, down from 5.03 percent the previous week. The current rate is just slightly above the all-time low from the week of January 15, 2009 when it hit 4.96 percent. One year ago, the average rate was 5.87 percent.

“Long-term mortgages followed bond yields lower for the second week as reports of slower industrial production suggested that business spending might ease this year,” Nothaft also pointed out. “Output at factories declined for the fourth consecutive month by 1.4 percent in February driven by declines in computers and machinery and experienced the largest 12-month drop since June 1975. In addition, factory capacity utilization slumped to 70.9 percent, matching the lowest rate since records began in January 1967.

Rates on the 15-year fixed rate mortgage loan fell to 4.61 percent, from 4.64 one week earlier. According to Freddie Mac records, the current rate is an almost six year low. Last year at this time, the average rate was 5.27 percent.

Interest rates on one-year adjustable rate mortgages however, increased in the latest week, growing to 4.91 percent from 4.80 percent. During the same week of 2008, the average rate was 5.15 percent.

Following reports of weak economic growth, rates on long-term mortgage loans fell in the latest week, according to mortgage financier Freddie Mac Thursday.

“Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Real Gross Domestic Product was revised from a 3.8 percent decline to a 6.2 percent drop in the fourth quarter mostly led by a 4.3 percent fall in consumer spending, which was the largest decrease since the second quarter of 1980.”

The average rate on a 30-year fixed rate mortgage dropped to 5.03 percent, excluding fees, during the week ended March 12, 2009, down from 5.15 percent the previous week. One year ago, the average rate was 6.13 percent.

Rates on 15-year fixed rate home loans averaged 4.64 percent, a decrease from 4.72 percent the week before. Last year at this time, the average rate was 5.60 percent.

The average interest rate on a one-year adjustable rate mortgage fell to 4.80 percent, doen from 4.86 percent last week. During the same week of 2008, the average rate was 5.14 percent.

In addition to the reports of weak GDP figures, Nothaft commented that negative housing data also had a downward effect on rates this week.
“The housing market continues to slow as well,” he said. “New home sales fell 10.2 percent in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7 percent, the weakest since the series began in January 2001. More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization.”

Yet there may be a silver lining to the gloomy economic news. “Given the recent historically low mortgage rates, homeowners have a strong incentive to try and refinance,” Nothaft said.

Interest rates on long-term mortgage loans fell in the latest week, according to mortgage financier Freddie Mac Thursday, sinking back down toward record low territory as more reports filed in pointing to continued economic distress.

“Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “And consumer sentiment fell in February for the first time in three months to near its lowest level since May 1980, while industrial production slowed in January by more than the market consensus. In addition, the Federal Reserve lowered its growth forecasts for this year during its policy-setting meeting on January 27-28, noting a deeper contraction in the economy as the credit crunch tightens.

“Meanwhile, the housing market is not doing any better. New housing construction slowed to an all-time record low of 466,000 homes (annualized) in January since records began in January 1959. And although homebuilder confidence ticked up in February from a record low, builder expectations of sales over the next six months hit a record low since it was first published in January 1985.”

The average rate on a 30-year fixed rate mortgage dropped to 5.04 percent, excluding fees, in the week ended February 19, 2009, down from 5.16 percent the previous week. The current rate is only slightly higher than the all-time record low of 4.96 percent from the week of January 15, 2009. One year ago, the average rate was an entire point higher at 6.04 percent.

Rates on 15-year fixed rate loans also sank, falling to 4.68 percent from 4.81 percent the week before. Last year at this time, the average interest rate was 5.64 percent. One-year adjustable rate mortgages average 4.80 percent, a decrease from 4.94 percent one week earlier. A year ago, the average rate was 4.98 percent.

Both mortgage interest rates and the demand for home loan funding tapered off in the past week, according to separate reports from the Mortgage Bankers Association and mortgage giant Freddie Mac.

Freddie Mac’s Primary Mortgage Market Survey found that during the week ended February 12, 2009, the average rate on a 30-year fixed rate loan, excluding points, fell to 5.16 percent from 5.25 percent the week before. One year ago, the average rate was 5.72 percent.

Rates on the 15-year fixed rate mortgage slid to 4.81 percent, from 4.92 percent one week earlier. Last year at this time, the average rate was 5.25 percent. One-year adjustable rate mortgages averaged a rate of 4.94 percent, growing slightly from 4.92 percent, but still down from last year’s average of 5.00 percent.

“Interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below 2008’s peak set on July 24, 2008, offering many homeowners an incentive to refinance,” said Frank Nothaft, Freddie Mac vice president and chief economist. “…The Bureau of Economic Analysis estimated that the weighted average mortgage rate of loans outstanding was about 6.2 percent in the fourth quarter of 2008. As a result, the share of refinancing among the total number of conventional mortgage applications has exceeded 50 percent for the past 11 weeks and averaged 80 percent over this period, according to the Mortgage Bankers Association.”

However the MBA’s weekly survey reported that the total number of mortgage applications was down almost 25 percent during the previous week. The group’s refinance index fell 30.3 percent while the home purchase index dropped 9.8 percent to the lowest level in over 8 years.

The falling demand for mortgage money is apparently a reflection of rates reaching a two month high during the week ended February 6, 2009 as well as people choosing to move back to the sidelines waiting for home prices and interest rates to keep falling.

Interest rates on long-term mortgage loans dipped down by only 0.02 percent in the latest week, and rates on other loans saw relatively little change as well, according to mortgage finance company Freddie Mac Thursday.

During the week ended January 29, 2009, the average interest rate on a 30-year fixed rate mortgage inched down to 5.10 percent, excluding fees, from 5.12 percent. Two weeks ago, the average rate was 4.96 percent, while one year ago the rate was much higher at 5.68 percent.

Rates on 15-year fixed rate loans remained constant with the previous week at 4.80 percent. Last year at this time, the average rate was 5.17 percent.

One-year adjustable rate mortgages carried an average interest rate of 4.90 percent, down slightly from 4.92 percent the previous week. One year earlier, the average rate on a one-year ARM loan was 5.05 percent.

“Mortgage rates held steady this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The index of leading indicators rose 0.3 percent in December, the first increase in 6 months, fueled by an expansion in the money supply. However, the Federal Reserve acknowledged in its January 28th policy committee statement that since December the economy has weakened further.”

He cited as evidence an 28 percent annual decrease in the S&P/Case Shiller 20-city index through November and a 15 percent annual decline in home sales through December, according to the National Association of Realtors.

Yet there have been bright spots on the horizon. “Interest rates for 30-year fixed-rate mortgages reached a 50-year low toward the end of December,” Nothaft added. “These two factors contributed to housing affordability reaching its highest level since 1973, as measured by the NAR’s monthly affordability index and help to explain the 7.0 percent increase in existing home sales in December.”

The nation’s two largest residential mortgage funding companies, already under government conservatorship, may be asking for more money in the coming weeks, as loan delinquencies loom larger and the many subprime securities in their portfolios continue to suffer.

Freddie Mac made a regulatory filing Friday with the U.S. Treasury Department stating an intent to borrow another $30 billion to $35 billion in order to makeup for projected fourth quarter losses. Rival company Fannie Mae is likely to ask for $5 billion to $10 billion for similar efforts.

The two mortgage giants guarantee or hold almost half of all U.S. home loans and both were seized last September by the federal government. As both companies experienced deep portfolio losses and ultimately faced bankruptcy, the Treasury stepped in and established a conservatorship of each in order to save the already foundering mortgage market from a potentially crippling blow if either Fannie or Freddie went belly up.

Prior to the takeovers, both Fannie Mae and Freddie Mac were government sponsored entities, chartered by Congress to help provide money for increased homeownership but run by private interests.

Fannie and Freddie are perceived as being vital to the nation’s housing market, especially at this time as other sources of mortgage funding have contracted during the current credit crunch.

Freddie has seen greater losses  than Fannie in the latest quarter as its portfolio is stocked with more subprime mortgage backed securities. There are some analysts who believe that Fannie will be subject to more risk and loss through the current year as the value of mortgage securities is expected to drop further.

To date,  Freddie Mac has drawn out $14 billion of the $100 billion available from the Treasury. The newly requested funds for the company, based in McLean, Virginia, will be injected in the form of senior preferred stock.

Interest rates on long-term mortgage loans fell to another all-time low this week, breaking the 5 percent barrier, according to mortgage giant Freddie Mac Thursday.

“Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions,” said Frank Nothaft, Freddie Mac vice president and chief economist.

“So far,” he explained, “both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages. The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008 announcement, to further shore up mortgage lending and keep rates low.”

The average rate on a 30-year fixed rate mortgage dropped to 4.96 percent, excluding fees, during the week ended January 15, 2009, down from 5.01 percent the previous week. The rate has never been below 5 percent since Freddie Mac began keeping track of weekly rates in 1971. One year ago, the average rate was 5.69 percent.

Rates on 15-year fixed rate loans increased slightly however in the latest week with the average growing to 4.65 percent from 4.62 percent one week earlier. Last year at this time, the average rate was 5.21 percent.

One-year adjustable rate mortgages carried an average rate of 4.89 percent, down from 4.95 percent the week before. During the same week of January 2007, one-year ARM rates were higher than even fifteen-year FRM rates at 5.26 percent.

Meanwhile, during roughly the same week, the Federal Reserve bought up $23.4 billion of mortgage-backed bonds from Fannie Mae, Freddie Mac, and Ginnie Mae in an attempt to keep rates low and pump liquidity back into the lending markets.

The number of mortgage applications specifically for government-insured home loans continued to grow in October, according to recent data from the Mortgage Bankers Association.

The government-insured share of all applications (including Federal Housing Administration or FHA loans) rose to 32.9 percent during October 2008, the highest percentage since February 1991. It was also up dramatically from a 10.3 percent share last year at the same time. The percentage has steadily risen since the beginning of this year when it was 9.4 percent.

“This increase in the share of government-insured mortgage applications provides further evidence that there are still loans available to qualified borrowers, particularly through the FHA,” said MBA Chairman David G. Kittle. “The mortgage market remains fully operational and lenders are working to ensure borrowers with sufficient down payment and good credit have the opportunity of homeownership.”

The MBA suggested several reasons for the rise in popularity of government-insured loans over the past year.

For example, FHA loans are among the least expensive mortgages when it comes to down payment requirements. Borrowers can make a down payment as little as three percent of the total loan amount.

Another reason is that the Economic Stimulus Act of 2008 in March and then the Housing Bill in July raised the conforming loan limits, making it possible for those in high-cost markets to take advantage of FHA programs.

Additionally, borrowers with less than perfect credit will often more readily qualify for FHA loans than they would with loans from companies like Freddie Mac and Fannie Mae. +

Finally, FHA loans offer upfront mortgage insurance premiums which are often more attractive to buyers than paying hundreds of dollars in private mortgage insurance until the loan-to-value ratio reaches 80 percent or more.

As the economy becomes increasingly unstable, more and more borrowers are finding safety and financing availability with FHA loans. That will likely remain the case until the market reaches equilibrium again and investors return to mortgage backed securities arena.