Mortgage Rates on Way Up

Mortgage rates rose slightly for the first time in five weeks, increasing to an average of 4.21% on a 30-year fixed rate mortgage, according to Freddie Mac. The rise represents a small .02 increase from last week for borrowers paying 0.8% in discount points.

However, the increase was up from 4.19% last week, which was the lowest level for a 30-year mortgage since 1951. A year ago the same mortgage was at 5%. The near record low rates are seen as a more aggressive move by lenders to encourage refinancing and new home purchases, despite tighter lending criteria after a slowdown in purchases following the expiration of the federal tax credit.

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“Mixed inflation signals kept fixed mortgage rates at bay this week,” said Freddie Mac chief economist Frank Nothaft. “The headline producer price index jumped 0.4 percent between August and September, which was quadruple the market consensus, while the consumer price index fell below the market forecast.”

The 15-year fixed rate mortgage also increased to 3.64% with an average 0.7 points. Last year, it was 4.43%. The five-year Treasury index adjustable-rate mortgage dropped to 3.45% with an average 0.6 point. A year ago the average rate was 4.4%.

Freddie Mac surveys bankers weekly to determine average mortgage rates and is the oldest survey in the industry. Consumers are often able to obtain even lower rates for mortgages and refinancing by shopping around on the Internet to determine the best opportunities available in their region.

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