Mortgage rates surged to the highest levels in a year as Ben Bernanke’s QE2 plan to reduce mortgage interest rates has backfired and is blowing up in his face. Shockingly, mortgage applications continue to plunge. Could it be higher rates and plunging home prices? Do you smell another save housing plan coming from Washington DC?
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.13 percent from 4.81 percent, with points decreasing to 0.84 from 1.02 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the highest contract 30-year rate recorded in the survey since the week ending April 9, 2010.
bluestem says:
With mortgage rates going up then the interest rate on my piddly CD should be going parabolic any day now, right? John
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9th February 2011 at 10:55 am
Plato_Plubius says:
Bluestem said, “With mortgage rates going up then the interest rate on my piddly CD should be going parabolic any day now, right? John”
Good one! I love the smell of sarcasm in the morning.
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9th February 2011 at 11:13 am
Administrator says:
bluestem
Sorry. Bennie controls the short end. Your CDs will continue to get .25%.
Look at it as if you are taking one for the Wall Street banks. It’s the least we could do.
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9th February 2011 at 11:37 am
LLPOH says:
Wow – that should really help home sales.
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9th February 2011 at 9:44 pm
Administrator says:
Mortgage rates jump to 10-month high
Rates on 30-year fixed-rate mortgages not higher since April 2010‹
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — The average rate on 30-year fixed-rate mortgages jumped to its highest level since the last week in April 2010, after positive economic reports caused long-term bond yields to rise, Freddie Mac’s chief economist said Thursday.
The 30-year fixed-rate mortgage averaged 5.05% for the week ending Feb. 10, up from 4.81% last week and 4.97% a year ago, according to Freddie Mac’s weekly survey of conforming mortgage rates.
Historic house on the Hudson RiverFor art dealer Graham Arader, it was love at first sight when he came across “Pretty Penny,” a 19th-century home in New York’s Rockland County. He paid about $6 million for the house, but the family has rarely spent time there.
Rates on 15-year fixed-rate mortgages also jumped, averaging 4.29%, up from 4.08% last week. The mortgage averaged 4.34% a year ago.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.92%, up from 3.69% last week. The ARM averaged 4.19% a year ago.
And 1-year Treasury-indexed ARMs averaged 3.35%, up from 3.26% last week. The ARM averaged 4.33% a year ago.
To obtain the rates, the fixed-rate mortgages required payment of 0.7 point, while the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.
“Long-term bond yields jumped on positive economic data, which placed upward pressure on mortgage rates this week,” said to Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release. “For all of 2010, nonfarm productivity rose 3.6%, the most since 2002, while January’s unemployment rate unexpectedly fell from 9.4% to 9.0%. Moreover, the service industry expanded in January at the fastest pace since August 2005.”
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9th February 2011 at 11:07 am