Interest rates for the benchmark 30 year fixed rate mortgage remained above six percent for the third consecutive week; this is the highest mortgage interest rate for 15 consecutive months. A survey of national lenders last week stated the average interest rate for the 30 year fixed rate mortgage loan peaked at 6.15%. This is up from 6.1% the week before and the highest interest rate since July of 2004.
Mortgage rates were up across the board; this is the result of uncertainty in marketplace over inflation caused by record setting energy prices and natural disasters in the Gulf coast. The housing market in the United States has been under a record setting boom. Sales of homes are expected to set new records this year in spite of interest rate hikes by the Federal Reserve.
Industry experts are predicting the red hot housing market will begin to cool in 2006 due to higher mortgage interest rates. Last weeks survey stated that sales of new homes is up 2.1% this fall; however median home prices has dropped 5.7% showing the market is beginning to slow.
As for the fifteen year fixed interest rate mortgage, rates were up to 5.69% this week. Fifteen year mortgage loans are popular for homeowners refinancing their previous mortgage loans. Last week this fifteen year mortgage loan averaged 5.65%. Adjustable rate mortgages (ARM) are beginning to lose their luster; the one year ARM is up to 4.91%. Last week one year ARMs averaged 4.89; this is the highest rate for adjustable rate mortgage loans since the spring of 2002.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
