Freddie Mac, Bankrate find mortgage rates moving higher

By Palm Beach Business.com

DELRAY BEACH — It was inevitable. Mortgage rates had to rise from record lows sooner or later, and it was sooner rather than later.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage moving to an average of 4.81 percent with an average 0.7 point over the past week from 4.71 percent a week earlier. Last year at this time, the 30-year averaged 5.47 percent.

North Palm Beach-based Bankrate.com’s national mortgage survey found the 30-year up slightly this week to 5.04 percent, with 0.43 point, from 5.01 percent a week earlier.

"Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed," Freddie Mac Chief Economiist Frank Nothaft, said. "The economy shed only 11,000 jobs in November, far fewer than the market consensus forecast, and the unemployment rate unexpectedly fell to 10 percent. In addition, revisions added 159,000 jobs to September and October."

Despite the slight bump in rates, mortgages remain a bargain by historical standards. Nofhaft said the average 30-year is almost 0.7 percentage point below those at the same time last year.  That translates into an $81 lower monthly payment on a $200,000 conventional mortgage.
From Bankrate: “The Federal Reserve continues to sing the same tune about keeping interest rates low for an extended period of time, credit markets remain on edge about potential defaults in emerging markets such as Greece, and sufficient skepticism exists that the November employment report could be a one-hit wonder. Each of these helps keep a lid on the long-term Treasury yields to which mortgage rates are closely related.”

Bankrate’s panel of mortgage experts sees rates heading higher over the next month, month-and-a-half. Only 14 percent of the panelists sees rates falling, while 29 percent sees rates in a relative holding pattern.