Current mortgage rates tilted slightly up overnight according to Bankrate.com. This could slow down mortgage refinancing applications and make home purchases more expensive.
In a week of bad housing news, with both existing home sales and new home sales declining last December, the last thing the real estate market needs is an increase in mortgage rates.
Bankrate.com reports that 30-Year Fixed-rate mortgages average 5.16% today, compared iwth 5.07% last week.
While that may not seem like much, even on a relatively small mortgage of $150,000, that slight increase in interest means the borrower will pay an additional $2,988 more over the course of the 30-year loan period.
Other mortgage rates also rose slightly
- 15-Year Fixed-rate loans rose to 4.66% from 4.58%.
- 5-Year ARMs rose to 4.23% from 4.18%.
Despite last week's lower interest rates, mortgage applications were down last week, according to the Mortgage Bankers Association. Refinancing applications dominate the mortgage market now, so rising rates could slow down mortgage lending further.
The Federal Reserve and the Treasury Department are expected to reduce their support of the mortgage market which has kept mortgage rates historically low in recent months. That policy change, anticipated to take place in March 2010, could cause mortgage rates to increase to 6% or higher.
Written by Michele Lerner
HULIQ.com
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