Fixed Mortgage Rates Rise Sharply After Hitting Record Lows
Fixed mortgage rates went back up this week after reaching record-breaking lows earlier in the month of October.
The 30-year fixed mortgage rate averaged 4.12% for the week, Freddie Mac announced Thursday. Last week, the rate fell to 3.94%, the first time in history that the interest rate fell below 4%. For comparison, at this time last year, the average 30-year year fixed rate was 4.19%.
Rates for 15-year fixed loans and adjustable-rate mortgages also rose, according to Freddie Mac, which looks at loans of up to $417,000.
“An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well,” Frank Nothaft, vice president and chief economist for Freddie Mac, said in a statement.
Despite the super low rates, the housing market continues to struggle with anemic sales and declining home prices – forced down by millions of foreclosures.
According to Fannie Mae’s August 2011 national consumer survey, 78 percent of Americans believe the economy is moving in the wrong direction. Twenty-seven percent believe home prices will continue to fall, and 22 percent believe their financial situation will deteriorate over the next year.
Economists say fixed mortgage rates need to fall at least a full percentage point before it makes sense to refinance again.
