By Mike Colpitts
Mortgage rates rose to the highest level since last May as home buyers jumped back into the market, according to Freddie Mac. The rate on a 30-year fixed rate mortgage rose to 4.86%, a .05 move up for the week.
The National Association of Realtors pending home index rose 3.5% in November to 92.2 based on purchase contracts signed during the month from 89.1 in October. The improvement marks a 5% decline from one year ago when the federal tax credit for home buyers was available. However, the index shows a sharp improvement for the month, representing contracts and not closings, which usually take a month or two to close.
Home sales are showing an improvement since a downturn following the expiration of the federal home buyer tax credit with sales of new and existing homes up 5.5% in October and 5.6% higher in November, according to NAR figures.
Rates on a 15-year fixed rate loan also increased by the same margin for the week with 0.8 point. A year ago the same mortgage was 4.54%.
Interest rates on a 5-year Hybrid adjustable rate mortgage also rose slightly over the holiday week, but were still below the year’s highs set in the first half of the year.
The 30-year fixed mortgage averaged just below 4.7% for 2010, which represents the lowest annual average since 1955 when secondary market yields on FHA mortgages were above 4.6% and the average price of a home was $22,000.